PART A

Access the Procter & Gamble Company website and download: the annual report for 2020. Note: this file is available at:

https://assets.ctfassets.net/oggad6svuzkv/6QbpwzgFixJeAgimiiy9L4/77b265d2bef5420f73b846474e60ebd6/PG-2020-Annual-Report.pdf

Answer the following questions:

1)How does Procter & Gamble Company account for goodwill, other intangible assets? State the amounts of each intangible asset as it appears in the annual report for 2019 and 2020. Support your answer by writhing the page number(s) in annual report. (7 marks)

2)Did Procter & Gamble Company make any acquisitions during 2019? and how do these acquisitions affect the goodwill? Support your answer by writhing the page number(s) in annual report.

(5 marks)

3)From the annual report for the fiscal year 2020:

a)Determine the total amount of non-controlling interest in 2020

b)State in which statement it is disclosed and in which section.

c) State the amount of controlling interest share and non-controlling interest share in Procter & Gamble Company's profit for 2020

d)State the amount of non-controlling interest share in Procter & Gamble Company's dividends for 2020.

e)Procter & Gamble company prepared its consolidated financial statements in accordance with Generally Accepted Accounting Principles ("GAAP") as mentioned in its annual report. Assuming that it was not mentioned in the annual report that the company is following GAAP, can you provide evidence from annual report (related to course subjects studied) that indicate that the company is following GAAP?

4) Procter & Gamble Company reported impairment losses for the impairment of goodwill and other intangible assets in 2019. Referring to Procter & Gamble 's 2020 annual report, address the following:

a) State the amounts of impairment losses of goodwill and other intangible assets.

(3.5 marks)

b) Which cash generating unit suffered an impairment loss related to goodwill and other intangible asset? (1.5 mark)

c) What were the underlying business reasons that required Procter & Gamble to record a goodwill impairment in 2019? (5 marks)

d) How did Procter & Gamble reflect the 2019 goodwill impairment in its income statement and cash flow statement? (3 marks)

e) Which method did Procter & Gamble use in preparing its cash flow statement? Provide a proof for your answer. (2 marks)

f) Almost all businesses have been badly affected by the spread of Covid-19 in 2020. Nevertheless, Procter & Gamble's 2020 annual report shows that net income in 2020 is significantly higher than net income in 2019. Give an explanation for this situation and provide evidence from annual report. (3 marks)