Explain how to account for marketing-related assets such as brands and trademarks, initially and subsequently (i.e., measurement and recognition) in accordance with IFRS3 Business Combinations, IAS 38 Intangible Assets

CPA Financial Accounting

Your tasks

Your tasks include a journal article study and an annual report assessment. You are required to complete the tasks in a report format.

B1. Journal article study
Read the following journal article.

Sinclair, Roger, and Kevin Lane Keller. 2017. "Brand Value, Accounting Standards, and Mergers and Acquisitions: ‘the Moribund Effect.`" Journal of Brand Management 24 (2): 178-92.

Prepare your written responses to the following requirements.

Explain how to account for marketing-related assets such as brands and trademarks, initially and subsequently (i.e., measurement and recognition) in accordance with IFRS3 Business Combinations, IAS 38 Intangible Assets, and IAS36 Impairment of Assets.

Describe the accounting methods for marketing-related assets advocated by Sinclair and Keller (2017). Highlight the differences between (1) and (2).

Do your research to learn more about accounting for marketing-related assets and marketing activities. Report your findings with proper in-text citations and referencing. (This section should discuss at least 3 reference items.)

In your opinion, how companies should account for marketing-related assets? Would you recommend any changes to the recognition and measurement practices prescribed by the standard setter? What additional disclosure requirements would you recommend? Why? Explain your answer in reference to the qualitative characteristics in the Conceptual Framework.

B2. Annual report assessment
You are required to select an ASX-listed company for this assignment and retrieve its annual report(s).

You may choose one company from the following list. (Up to 5 groups can choose each of the following companies on the first-come, first-serve basis. Please sign up at Blackboard => Assignment Group Sign Up.)

Adairs Limited - Annual report 2020
Bega Cheese Limited - Annual report 2021
Best & Less Group - Annual report 2022
Breville Group Limited - Annual report 2022

Alternatively, you can find a company on your own. Your chosen company must report marketing-related assets in its financial statements.

After retrieving the annual report, prepare your written responses for the following requirements.

Based on the annual report(s) of your selected company, explain the nature of marketing-related assets that the company has and explain how those assets are recognised and measured. (If the business combination which gave rise to the assets occurred in an earlier year, you may need to read the earlier annual report to obtain data for your writing.)

Apply your recommendations in item (4) above to the selected company. For example, if you recommend additional disclosure, prepare a draft of sample disclosure for the selected company. If you recommend that accretion should be recognised, show the journal entries and outline how the gain should be measured.

B3. References
Provide a list of the publication details of all materials referred to in the report. More information on the Chicago referencing style can be obtained from the Curtin library website.

B4. Appendix
Provide a copy of the balance sheet, income statement, and accounting policies of business combination, intangibles and impairment from the annual report(s) of your selected company.