ABC_Group assignment case and guide_2024AUT

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TAFE NSW - Sydney Institute *

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521

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Accounting

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Apr 3, 2024

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docx

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Uploaded by ChancellorThunder13861

22320 Accounting for Business Combinations Autumn 2024 Group Assignment Introduction The aim of the group assignment is to enhance students’ ability to conduct independent research and apply the knowledge and skills learned in this subject to evaluate various facets of real-world merger and acquisition transactions . Students will also have the opportunity to work in groups in preparing a written report of their findings using a format similar to that used by professional consultants in addressing business problems. Objectives This assessment relates to the following subject and program learning objectives:  SLO 1. Apply the regulations that determine accounting and reporting for economic entities.  SLO 4. Discuss, in written form, the appropriate accounting treatment applicable in the given circumstances.  PLO 2.1. Locate and critically evaluate relevant data and literature to address business problems through a research approach. Critically evaluate data and resources in the context of relevant academic literature.  PLO 2.2. Apply critical and creative thinking to address issues in business. Weighting and marks 20% of the total marks for the subject. Group size and composition The assignment is to be completed in groups of five students, except with the permission of the subject coordinator. All students in a group must be enrolled in the same tutorial class. Students are to self- sign-up into groups on Canvas based on their tutorial enrolment by Week 5 at the latest . Assignment Questions On 19 April 2023, Wesfarmers Limited (ASX: WES ), through its wholly-owned subsidiary Australian Pharmaceutical Industries Pty Ltd, proposed to acquire 100 percent of the outstanding shares of SILK Laser Australia Limited (ASX: SLA ). Based on your own research, critically evaluate and analyse the acquisition of SILK Laser Australia Limited by Wesfarmers Limited. Your discussion should address but is not limited to the following questions. 1. What do you think are the economic rationales driving this acquisition for Wesfarmers? How did the share price of SILK react to the initial and subsequent acquisition offers by Wesfarmers? What can you infer from the price reaction as regards the underlying economic value of SILK? 2. Discuss the deal structure and your evaluation of the choices made by Wesfarmers. These include, but are not limited to, the timing of the deal, acquisition method used, offer price, payment methods (cash or shares), premium, etc. 3. A cursory look at the 2023 statement of financial position of SILK reveals that intangible assets (including goodwill) accounted for more than 50% of the total assets. Based on your own research, 1

explain what these intangible assets are and where they are coming from. 4. Did Wesfarmers recognize any goodwill or bargain purchase gain arising from the acquisition of SILK? Based on AASB 3, apply the acquisition method and prepare an acquisition analysis to find out how much the goodwill or bargain is. Discuss any significant discrepancy between the assessed fair value and the amount at which these assets and liabilities are carried in the June 2023 statement of financial position of SILK. Pay particular attention to the fair value of intangible assets acquired. [ Hint: Refer to Wesfarmers’ half-yearly report (February 2024) for information on the provisional fair value recognized on acquisition of SILK .] 5. The Scheme Implementation Deed for the acquisition of SILK by Wesfarmers contains provisions for “no-shop, no-talk, no due diligence and matching right”. Explain, in your own words, what these provisions are and why are they included in the deed. Additional information: While the assignment is largely practical in nature, assignments gaining higher marks will need to refer to academic literature to support arguments, in addition to internet and practitioner-based literature. These can be located through search engines (e.g., Google Scholar) and the UTS library website. You are only to use publicly available information in order to complete this assignment. For example, the internet, annual reports, company announcements, newspaper, journal articles, databases, and books. One important source of information for this assignment is Morningstar’s DatAnalysis Premium database available via the UTS Library website. You can obtain all the corporate announcements made by the acquirer and acquiree, their scheme booklet and annual reports, together with their historical stock prices. Just visit the UTS Library website and search for DatAnalysis Premium database to gain access. Once you are in the database, you can key in the ASX ticker of either company in the search box to access company-specific information. Academic integrity Academic integrity is of utmost importance at UTS. For a guide to practicing academic integrity, visit the page on Canvas using the link here . Students may use GenAI in this group assignment. However, it is important to ensure that your assessments are your own original work. In other words, any GenAI content must be correctly acknowledged and referenced . Failure to do that will result in academic misconduct. There are some key considerations to keep in mind before using GenAI:  Currency and accuracy . GenAI can produce content that seems realistic and factual; however, the information can be non-factual, inaccurate, outdated and sometimes false . It is important to use your critical thinking skills to evaluate and fact-check all content from GenAI.  Academic integrity . You need to acknowledge when you have used information from other sources in your work. This includes content from GenAI tools.  Bias and quality . Sometimes content generated by GenAI is generic in nature (as well as potentially false) which may impact the quality of your work. GenAI can also be subject to biases or commercial agendas , which means you don't get the full perspective on a topic. 2

Formatting and final submission instructions Cover sheet and original authorship statement Each report must be accompanied by a completed cover sheet, including the original authorship statement, signed by all team members (see end of this document). Your assessment submission will be processed through Turnitin. Where the teaching staff have concerns about whether you have completed your own work (for example, your document has low editing time, a low version number or does not appear to be prepared by you for any other reason), you may be asked to provide documentation showing the drafting process you have undertaken in reaching your final submission . This process is similar to real-world accounting, where documents showing the preparation of the financial statements, accounting advice to clients, tax advice or the audit report/opinion are commonly referred to as 'working papers' and must be provided to regulatory bodies on request. For students, your working papers for this assignment can include notes, drafts, access to cloud-stored documents in services such as Google Drive or OneDrive, or internet search history related to the assessment task. It is recommended that you retain these notes, drafts, etc. for at least four months after the end of the teaching session (businesses and accountants in Australia are required to keep their working papers for seven years). Failure to be able to provide such material on request from your coordinator, Academic Integrity Officer or Responsible Academic Officer of the university may be used in misconduct allegations against you. Any request will be made to you in writing to your UTS email address. Dispute This group assignment is an opportunity for students to work as a team. Good team work involves effective communication among group members, allocation of tasks and meeting deadlines. To facilitate a good outcome, every group should elect a team leader in their first meeting and discuss issues and set policies (see details on the Group Registration Form) regarding how to proceed with the assignment. Any disputes among members should be worked out, in the first instance, within the group. If the issues cannot be resolved internally, let your tutor know as soon as practicable for assistance. After submission, students who still have concerns over unfair contribution by individual members can fill out a peer review form on Canvas. Report structure The assignment is to be written as a professional consulting report . The report must follow the formatting requirements outlined in the UTS Guide to Writing Assignments . The writing guide can be downloaded here: https://www.uts.edu.au/sites/default/files/2020-02/UTS%20Business%20writing%20guide%202020.pdf Page limits The report should have a maximum length of 15 pages . The structure and relevant page limits of the final report are as follows:  Signed cover sheet (not included in page limit)  Table of contents (not included in page limit)  Executive summary (max. 150 words)—this summarizes what the report found and conclusions. This is different from an essay introduction, which introduces what the report will cover  Introduction—introduces the companies, industry and the context of the report  Main body—includes main text, diagrams, figures and tables, etc., for the five main questions 3

 Conclusions (max. 200 words)  Reference list (not included in page limit)  Appendices (not included in page limit) Formatting of text  Font: Times New Roman, 12pt  Line spacing: double line-spacing  Margins: At least 2.54 cm for top, bottom, left and right margins Referencing All sources of information must be referenced in the report using the APA referencing style. Details on this style can be found in the writing guide. Further information can be found here: https://www.lib.uts.edu.au/referencing/apa For a guide and example on how to reference GenAI in APA (7 th ) format, visit the Canvas page here . Any source referenced ‘in-text’ must be listed in the reference list at the end of the report. Any report that contravenes the referencing policy may draw severe penalties and be referred to the student misconduct committee. 4

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