Page 50 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 3: Accounting Standards (AS) – 14

self assessment notes

Fill in the blanks:
1. Any activity that you perform is facilitated if you have a set of rules to ............... your
efforts.
2. This Accounting ............... should be read in the context of the Preface to the Statements of
Accounting Standards.
3. ............... is the amount for which an asset could be exchanged between a knowledgeable,
willing buyer and a knowledgeable, willing seller in an arm’s length transaction.

4. When the ............... of the relevant statutory reserves is no longer required to be maintained,
both the reserves and the aforesaid account should be reversed.
5. The business of the ............... company is intended to be carried on, after the amalgamation
by the transferee company.
6. All the assets and liabilities of the transferor company become, after ..............., the assets
and liabilities of the transferee company.
State whether the following statements are true or false:

7. Goodwill arising on amalgamation represents a payment made in anticipation of future
income and it is appropriate to treat it as an asset to be amortised to income on a systematic
basis over its useful life.
8. The amount of any difference between the consideration and the value of net identifiable
assets acquired, and the treatment thereof, including the period of amortisation of any
goodwill arising on amalgamation.
9. There are five main methods of accounting for amalgamations.

Task Discuss the two types of amalgamation with examples.



Case Study alternative to amalgamation

istorically soccer has developed a number of controlling bodies each looking after
a different part of the sport. Over time this has led to duplication of activity and
Hresources and difficulties in gaining funding or sponsorship.
Whilst there has been support from government and other agencies for a peak body, the
process has been driven by the soccer community to address these issues and attempt to
repair the public perception and media profile of soccer in South Australia.
Discussions about a peak body started over four years ago with initial meetings of
representatives from various soccer bodies, chaired by an independent, high profile soccer
identity. The outcome was that four key soccer organisations (South Australian Soccer
Federation, South Australian Amateur Soccer League, South Australian Junior Soccer
Association and South Australian Women’s Soccer Association) formed a new body -
‘Soccer SA’.
Contd...

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