QUESTION
ACCG 224 INTERMEDIATE FINANCIAL ACCOUNTING ASSIGNMENT
SEMESTER 1, 2012
Due: 5PM – Friday 4
th
May 2012 with SIGNED cover sheet
Where: City Campus Reception
Assessment percentage: 15% (a 25% late penalty will be applied for each day or part
ACCG224- Research Case Study- Sem 1, 2012 Page 1
there – of)
Bac kground Inform ation
I am requesting your advice as to how to account for the acquisiti on of Austin Power Ltd and
the whether the executives may be considered as asset s to the company. Specifically, I would
like you to ensure you have addressed the following matters:
(a) T he accounting treatment of the costs associated with the acquisition of Austin
Power Ltd and the recognition of goodwill , if any . I am keen to underst and the
accounting standard underlying such a transaction. I would also like to know
what happens to the goodwill after it has been initially recorded.
(b) Given the huge costs associated with the top executives and their contractual
commitments to Zanadr iana, the possibility of capitalizing their costs as an
intangible asset.
I look forward to receiving your advice. Please respond in a written letter.
Kind regards
Ian Dunno
ACCG224- Research Case Study- Sem 1, 2012 Page 2
Re quire d:
Draft a business letter to Ian Dunno to provide advice and clear answers and explanations to
each of his questions and issues. Issue (1 ) will be marked out of 12 and Issue ( 2 ) marked out
of 8 .
ACCG224- Research Case Study- Sem 1, 2012 Page 3
Max im um le ngth: 1,200 words. (Letters exceeding this word limit will be penalised by 10% of
technical marks.)
1. Te chnical c om pone nt
SOLUTION
To
Ian Dunno
CEO
