Question: question five 3 3 6 marks barooga...
QUESTION FIVE ( 3 + 3 = 6 marks)
Barooga Ltd acquired two copyrights during 2016. One copyright related to a textbook that was developed internally at a cost of $10,500. This textbook is estimated to have a useful life of 5 years from 1 September 2016, the date it was published. The second copyright was purchased from the Queen Elizabeth University Press on 1 December 2016 for $12,000. This book, which analyses Aboriginal history in Western Australia prior to 2000, is considered to have an indefinite useful life.
A) For each of these two copyrights, discuss the required accounting treatment under the current accounting standards. ( 3 marks)
B) Discuss how the required accounting will bias ROE. Describe any necessary assumptions or conditions. ( 3 marks)
QUESTION SEVEN ( 7 marks)
Discuss whether fair value measurement of assets and liabilities is better suited to the valuation objective or the efficient contracting stewardship objective of financial reports.
QUESTION ELEVEN ( 2 + 4 = 6 marks)
Australian Financial Review 7th May 2020
A) Give two potential motivations for why Crown, an Australian Casino company, wants to report most expenses incurred after March 23 “below the line” (2 marks)
B) Will whether Crown reports most expenses incurred after March 23 “below the line” or “above the line” affect the share markets valuation of Crown? Why or why not? ( 4 marks)