1 The accounting policy disclosures for News Corp in 2020 refer to a range of intangibles. Explain what each of the following would represent for News Corp:

a newspaper mastheads b trademarks and tradenames c distribution networks d customer relationships e goodwill.

2 Explain why radio broadcast licences, distribution networks, customer relationships and computer software are treated as assets.

3 What is an alternative accounting treatment to capitalising software costs? What impact would a change to this other method have on the financial statements?

4 How would the period of amortisation be determined?

5 What impact would an increase in the number of years over which an intangible asset is amortised (e.g.

from two years to four years) have on the financial statements?

CASE 13D Asset valuations Large airlines, like Qantas, invest billions of dollars in aircraft which are recorded as assets on their balance sheets.

The profitability of airlines is closely linked to fuel prices, so an increase in fuel prices (or a change in exchange rates) will likely have a negative impact on profit. In a situation like this, the value of the aircraft may need to be written down to reflect lower in-use valuations. Depreciation of aircraft may also be adjusted to reflect lower valuations.

Another increasingly important element of the business of airlines is their loyalty schemes which are also recorded as assets on the balance sheet and are subject to the same rules as other types of assets.

1 What is meant by in-use valuations? How does a profit outlook challenge in-use valuations?

2 What is the impact on the financial statements of hastening depreciation on aircraft or a massive write-down in the financial statements?

3 Why was the loyalty scheme considered an asset? What would be the impact of writing down the value of a loyalty scheme?