Students are required to perform independent research of the key topics by reviewingthe applicable accounting standards and other guidance documents available on thewebsites of the professional accounting bodies.Learning Outcomes:1. Explain the legislative requirements in company formation and how toaccount for equity, capital and distributions;2. Explain the methods of raising company funds, that is, using share capitalor debt, and how to account for each;3. Demonstrate the ability to prepare consolidated financial statements andhow the data is collected, adjusted and interpreted.HA2032 Assignment SpecificationsPurpose:This assignment aims to reinforce and extend students’ knowledge and understanding of key topicsin this course (HA2032) including: business combinations, the corporate group, acquisition methods,intra-group transactions and non-controlling interests through independent research and detaileduse of the relevant accounting standards.Assignment QuestionsPart A (5 marks)You are a non-executive director attending a regular board meeting for JKY Ltd. At the top of theagenda is the proposed takeover of a smaller company called FAB Ltd, which is an ASX listed entityoperating in the same industry. JKY Ltd is considering which acquisition strategy should be used. Onedirector is arguing that the direct “purchase / acquisition method” is the best option, whilst anotherdirector is proposing a longer term strategy, which involves acquiring the shares of FAB Ltd by firstacquiring “significant influence” over FAB Ltd. Given your experience as a qualified CPA, the Chairmanhas asked you for your opinion in writing based on your extensive knowledge of accounting forbusiness combinations.With reference to AASB 3: Business Combinations, AASB 128 Investments in Associates and JointVentures and AASB 10 Consolidated Financial Statements, prepare a detailed response to theChairman and the board, which outlines the key differences in methodology between ConsolidationAccounting and Equity Accounting. Provide worked examples within your response which fullyexplain the two options.Part B (5 marks)At the same board meeting the CFO reported that a partially owned subsidiary providedprofessional services and sold inventory to the parent company JKY Ltd at a profit. The CFO isseeking clarification from the board in relation to whether profit should be deducted from thesubsidiary’s reported profit for the sale of inventory and for providing the professional services tothe parent entity. Secondly, how will this affect the non-controlling Interest (NCI) calculation in thesubsidiary’s annual profit?With reference to AASB 127 Consolidated and Separate Financial Statements and AASB 10Consolidated Financial Statements and the issues raised in Part B, discuss the key principles andprovide examples which explain how intra-group transactions should be treated.Part C (7.5 marks)You are now finalising the consolidated financial statements in the annual report for JKY Ltd as at30 June 20X8. AASB 127 requires that the NCI is reported as a separate item of owner’s equity. Aspart of the preparation, you must also consider the allocation of other comprehensive profit to theNCI. The Financial Accountant responsible for the subsidiary has already informed you that theassets of the subsidiary were recorded at historic cost at the control date.What changes may be required to ensure that the consolidated financial statements are correctlystated? How would any required changes affect the disclosure requirements in the annual report?With reference to AASB 127 Consolidated and Separate Financial Statements and AASB 101Presentation of Financial Statements, discuss the effects of the NCI disclosure requirement as aseparate item in the consolidation process.Page 3 of 5HA2032 CORPORATE AND FINANCIAL ACCOUNTINGThe Assignment Structure should include the following details:1. Holmes Institute Assignment Cover Sheet – Student Name, Student No., Session No. is required.2. Executive Summary – 100 words (max.) – A brief and concise paragraph which states the mainpoints and summarises the main conclusions. No in-text citation or direct quoting is required.3. Table of Contents Page – 50- 100 words – Note – this will be excluded from the total word count.4. Introduction – 100 words (max.) – A concise paragraph which introduces the main themes ofeach section in Parts A – C, coherently and logically.5. Part A Response – 500 – 600 words – This section should address both Consolidation and EquityAccounting equally with examples to explain the key concepts and differences.6. Part B Response – 500 – 600 words – This section should focus on Intra-group transactions anddiscuss how profit is allocated.7. Part C Response – 850 – 900 words – This section should focus on the disclosure requirements ofthe NCI and explore the issues which arise from the consolidation process.8. Conclusion – 100 words (max.) – This should be a brief and concise paragraph which reiteratesthe main points from each section in a coherent and logical manner.9. Reference List – As required – Note – this will be excluded from the total word count. This shouldinclude the relevant Accounting Standards as well as relevant selected articles from Academicjournals. Students should use “Proquest” or “Google Scholar” as a starting point with theirresearch. Students can also refer to the CPA website www.cpaaustralia.com.au for more relevantinformation and additional content.