TMA on Advanced Accounting Concepts and Practices for Businesses

The TMA covers the advanced accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. This TMA requires you to apply the course concepts. The TMA is intended to:
Assess students’ understanding of key learning points within chapter 1, 3, 4 and 5. 
Increase the students’ knowledge about the reality of the advanced Accounting issues. 
Develop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.
Develop the students’ ability to understand and analyze different issues that corporations might face in real world.
Develop basic ICT skills such as using the internet.

The TMA:

This TMA is divided into two parts. Part A “business combination” and Part B “intercompany transaction and relevant information”. 

The TMA requires you to:

1-Review various study chapters in addition to supplementary materials.
2-Conduct a deep information search using the internet and your E-Library. You are expected to use E-library sources to support your answers.

Part A

Access the Coca Cola Company home web page and download: the annual report for 2019(Form 10-k) 

Answer the following questions:
 
1) How does Coca Cola Company account for Goodwill, Trademarks and Other Intangible Assets? (5 marks)

2) Does Coca Cola Company make any acquisitions during 2019? How these acquisitions affect the goodwill? (5 marks)

3) Determine the total amount of non-controlling interest for 2019 and state in which statement it is disclosed. Also, state the amounts of non-controlling interest share in Coca Cola Company profit and Coca Cola Company dividends for 2019. (5 marks)

Part B:

In 2018. CVS Health Corporation reported a $6.1 billion charge for the impairment of goodwill in one of its reporting units (segments) in its 10-K annual report. Referring to CVS Health's 2018 financial statements and any other information from the media, address the following:

1.CVS Health's segments serve as its reporting units for assessing goodwill for potential impairments. Which segment suffered a 2018 impairment? Describe the revenue model for this segment.   (5 marks)

2.What were the underlying business reasons that required CVS Health to record a goodwill impairment in 2018? (10 marks)

3. How did CVS Health reflect the 2018 goodwill impairment in its income statement and cash flow statement?         

4.Describe in your own words the goodwill impairment testing steps performed by CVS Health in 2018 and the consequent loss measurement. 

Part C

1) Firms should conduct the impairment test for goodwill at least annually. Accounting standards require more frequent impairment testing if some events occurs.

a) Identify the main events upon which goodwill undergoes a test for its impairment. 

Part D:

1- If the accountant did not prepare the elimination entry of unrealized profit in inventories at the end of any year, this will affect the consolidated net income in that year and in all subsequent years. Discuss this statement and support your answer with a numerical example. (5 Marks)

2- Why is it crucial to know the direction of sale of inventory when preparing the consolidated financial statements?