Hometown Athletic Football Club (Hometown) is a professional football club based in Europe. The club was founded in 1972 and is very successful, having won four league titles over the past ten years. It is the only club to have completed a league season unbeaten. Three months ago, in January 2020, you landed your dream job and are now Chief Financial Officer (CFO) of Hometown Athletic Football Group. Having spent 10 years in various management accounting roles, you successfully applied for the position. You are a lifelong supporter of Hometown FC, and a passionate soccer fan. This was your dream job, or so you thought! It is 11.30pm on 26 Mac 2020 and you are still in your office. The weather has been beautiful for the past two weeks but you have seen little sunshine. You have been attempting to complete the Hometown Group financial statements for the year ended 30 June 2020. It is proving difficult. The previous financial controller left the company rather suddenly in April, and his work files are in a bit of a mess. On top of that, the Chief Executive Officer, Patrick Cordon, is on holiday in Australia celebrating his 25 year wedding anniversary. He is not available for another two weeks. You are feeling rather tired and deflated. This is not how you envisaged life as CFO of your favourite club. However, you are making progress. In the last two days, you have managed to form a first draft of the financial statements of Hometown and each of its two subsidiaries, Salvon Ltd. (Salvon) and Exonic Ltd. (Exonic) Salvon is a sports retailing company acquired by Hometown in 2003 for $40m when Salvon's reserves were $22m. Hometown owns 75% of Salvon's equity share capital. The other subsidiary, Exonic, is a 3 star hotel group whose properties are located close to large football stadium. On 1 July 2018, Hometown acquired 90% of the net assets of Exonic when Exonic's reserves stood at $17m. This acquisition has proven to be difficult as there was a delay in establishing the fair values of net assets at the date of acquisition. These values arrived by email just this morning but they have not been incorporated into the draft accounts below. AQ011-3-M-FAR Individual Assignment Page 2 of 3 Masters Asia Pacific University of Technology and Innovation 20220920 You have tried hard to understand the structure and the previous year's financial statements and found that something is very suspicious and irregular about the accounts. You called for an urgent meeting with your finance team and internal auditors to brainstorm about the irregularities. To your surprise, the fundamentals of accounting concepts and principles of Hometown Athletic Football Club are not appropriate. It is heartbreaking to know a professional and successful football club will be in distress if this process were carried out in the future and the consequences are unbearable. One of your team members blows the whistle on the wrongdoing and irregularities which took place when the previous financial controller was in position. The whole team was in the furious situation and in a dilemma wondering whom to be blamed. Without further delay, you took the head spear to solve these issues on an urgent basis and put things back into place. You reported this to the headquarters and notified all the Board Members followed by an extraordinary meeting which will take place later that weekend. You are now ready to tackle the list of outstanding matters that need to be resolved before you meet with the CEO, next week. The CEO has quite a knowledge of accounting and has emailed you with further specific points which she would like to discuss with you next week. Below are the inaccuracies spotted during your team meeting and from previous year's financial statements; i) Financial statements were not foam on a going concern basis. ii) There is no adaption of IFRS. iii) Ratio analysis was not done as a means of assessing the financial performance of a business. iv) Bank account figure is different from reported in its bank statement for the same period. v) Some ticket sales from a football match that took place in 2019 were not recognized as revenue but it was recorded in current liability. This is the right time to prove your capabilities as CFO and to share your invaluable financial accounting and reporting knowledge with your peers. You would like to foam a detailed memorandum to be released to the Board of Directors and members of the club before the meeting takes place. AQ011-3-M-FAR Individual Assignment Page 3 of 3 Masters Asia Pacific University of Technology and Innovation 20220920 REQUIRED: Propose a memorandum which: Explain and criticize each of the items (i) to (v). Your evaluation and analysis should include justification, based on appropriate IFRS, for your recommended treatment as well as the relevant calculations of how these will impact the consolidated statement of financial position and the consolidated statement of profit or loss and other comprehensive income for the Hometown Athletic Football Group. Kindly consider to include those points into your memorandum.

1. Follow the appropriate memorandum format.

2. The possible reasons why a company would not foam its financial statements on a going concern basis and whether they should or shouldn't adapt this principle into the business

3. The advantages of, and the obstacles to, the harmonization of accounting standards internationally and the process for the setting of International Financial Reporting Standards. 4. The main advantages and limitations of ratio analysis as a means of assessing the financial performance of a business and why a football club must consider assessing their financial performances by using ratio analysis.

5. Why the bank statement is usually taken as being more accurate than the details that appear in the company's own records. The potential reasons why accounting information reported in a company's bank account may be different to that reported in its bank statement for the same period.

6. The appropriate accounting standard for revenue. The conditions need to be satisfied before revenue from the sale of goods can be recognized in the financial statements in accordance with the standards. The importance of recognizing revenue for a football club.