This assignment is based on the following case study: Biosensors International Group: Valuation and Impairment Testing of Intangibles (HBSP No.: NTU053).

The case highlights that Matthew Tay, who is an analyst, is concerned about the significant increase in intangibles and goodwill from 4% to 62% of total assets of Biosensors International Group (BIG). Matthew wondered what the intangibles and goodwill represented, how they are recognized and how they should be interpreted. He also felt that the impairment review of the goodwill, which arose from the acquisition of JWMS, required special attention.

Prepare a report (refer to the format suggested by Monash Business School) to solve Mathew Tays concerns about the significant increase in goodwill and its consequences for financial reporting. In your report, critically analyse the accounting treatment of goodwill and the allocation of acquisition cost to goodwill. Also discuss whether the accounting treatment of goodwill in subsequent years could be a concern for financial reporting. Specifically, you could consider the following questions in your report.

2. Critically analyse the allocation of acquisition cost to goodwill by considering the following questions a. Is the allocation of acquisition cost to goodwill subjective? Discuss. b. How does the allocation of acquisition cost to goodwill affect profit and cash flows in subsequent years? For your critical analysis, you could compare the effect of the ACC-ACF2100 Financial Accounting (Group Assignment) Prepared by Dr Dharmendra Naidu, August 2021 3 accounting treatment of goodwill in subsequent years with the effect of the accounting treatment of property, plant and equipment (or intangibles with finite useful lives) in subsequent years.