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6 pages/≈1650 words
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APA
Subject:
Literature & Language
Type:
Editing
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English (U.S.)
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Topic:

Australian Accounting Standards Editing Assignment Paper (Editing Sample)

Instructions:

MLA, REVIEW QUESTIONS IN TO CORRECT GRAMMAR WHILE CORRECTLY ADDRESSING THE AUSTRALIAN ACCOUNTING STANDARDS AND ITS VARIOUS APPLICATIONS

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Content:


INSTITUTIONS NAME:
STUDENT'S NAME:
SUBJECT:
PART A
The herein below is the critical evaluation of the Australian requirements for accounting for business combinations as instructed:
* Exclusion from the scope of Accounting Standard AASB3 Business Combinations
On the outset, AASB3 Business Combinations' objective is to identify how financial reports are to be presented when a business entity enters into a Business combination undertaking with another. It stipulates that the business combinations must be accounted for by applying the Purchase Method. This will force the Business Entity acquiring the other to fully acknowledge and recognize all the identifiable assets, liabilities and contingent liabilities at a fair price, at the date of acquisition. At the acquisition date, the Acquirer will also recognize the Acquiree's goodwill which will eventually be tested for impairment rather than amortization.
This Standard will excludes Entities where:
* Two or more mutual Business Entities join hands to form Business combinations
* Separate Entities are combined to form Business Combinations of a joint venture nature
* Separate Business/Entities come together with the intention of forming a contractual reporting Entity without necessarily entering into any agreement of ownership interest as a
Business combinations.
* The Business combinations involve Business Entities under one single, central or common control like a chain of Supermarkets under one Common Control.
* Business combinations that involve two or more mutual entities
It is worth noting that the Standard will not apply to entities that are not required to prepare reports in accordance with Part 2M 3 of the Corporation Act as stipulated in Aus 1.1. Another exclusion to this Standard is outlined in Aus 1.3 of the AASB3 Business Combinations Standard where Annual reporting periods commence before 1st of January 2005.
* The implications of the acquisition-method requirement for accounting of merged business:
The AASB3 Business Combinations standards will: • impact on acquisition negotiations and structure the setup in an effort to minimize unsupported earnings impacts; • potentially influence the scope and nature of due diligence and data collection exercises before the acquisition; • bring up new policies and procedures to evaluate changes in the fair value of some assets and liabilities; • require prior assessment by the accounting and legal fraternity as well as that of valuation experts;
• influence the ‘how, when and what' of stakeholder commune
The International Financial Reporting Standard 3 (IFRS3) -Business Combinations, states that costs of acquisition (expenses incurred by the acquirer to effect a business combination-such as the broker's fees; cost of advice, legalization cost, accounts charges, valuation and other fees); General administrative costs (such as the costs arising from internal acquisitions services); securities registration and transfer charges, way down on the acquirer. The Acquirer will account for all the acquisition-related costs as expenses in the periods the costs are incurred and services rendered, with an exception of the costs of issuing debt or equity securities, which shall be recognized in accordance with IAS 32 and IAS 39.
* The identification of an acquirer in a business combinations
By definition, Business combination is bringing separate Entities together into a reporting Entity. In such an event, one of the Entities will tend to dominate or have a controlling edge over the other(s). This Domineering Entity is the Acquirer and the one(s) dominated or controlled is the Acquiree(s). The Acquirer is the coalescing entity with controlling powers over the other entities. The Acquirer has powers to set policies related to finance and operations on the other entity so as gain from its operations. Such powers of control by the Acquirer are ob

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