Identify errors and issues in the following transaction:

$1.$ WHS received regulatory approval on a new supplement which reduces inflammation and arthritis in

cats. The company has developed this product over the last five years. Buoyed by the success of the

commercialisation and approval of the new product WHS capitalised $$1,000,000$ in research costs

which had been expensed in prior periods as the directors have assessed this amount to commercially

reflect of the value of the $$brand$.$

$2.$ Byron Glow Pty Ltd pays administration and research facility fees of $$15,000$ and $$10,000$ respectively

each month to WHS$.$ The research fees are payable on the last day of each month and the

administration fees are payable on the $10$th day following the end of each month.

$3.$ WHS lent Byron Glow $$2,500,000$ to assist with the commercialisation of their revolutionary newly

patented medical device which assists hearing impaired dogs. The loan is interest only, with interest

charged at $4\mathrm{.}25$ per cent per annum and paid on the last day of each month. The loan is expected to

be repaid in full on $25$ January $2025.$

$4.$ A competitor of Byron Glow Pty Ltd released a new device to market which is technologically superior

to a similar device sold by Byron Glow Pty Ltd$.$ Byron Glow Pty Ltd has ceased production of this device,

however, believes demand will continue for their remaining inventory.

$5.$ WHS sold laboratory equipment to Byron Glow Pty Ltd on $20$ March $2024.$ The laboratory equipment

was originally acquired for $$80,000$ on $1$ July $2020$ and was sold for $$35,000.$ The laboratory equipment

was being depreciated by WHS on a straight$-$line basis over five years. Byron Glow Pty Ltd has assessed

that the laboratory equipment acquired has a remaining useful life of two years.

$6.$ Goodwill on acquisition was impaired by $$30,000$ in the year ended $30$ June $2023.$ The directors have

requested the impairment be reversed in the current year.

$7.$ WHS recorded a $$450,000$ revaluation increment in relation to the land owned on the Gold Coast.

$8.$ Byron Glow Pty Ltd leased research facilities in Melbourne on $1$ July $2023.$ The new facilities are in

response to the increasing demand for their products in the Victorian and South Australia regions. The

CFO advised the lease is to be accounted for as an annual expense as the company does not intend to

own the premises at the end of the lease. Annual lease payments of $$250,000$ are paid in full on the

last day of the year. You note from reading the related documents, the implicit interest rate is $5\mathrm{.}85\%$

and the lease term is non$-$cancellable for a period of five years.

$9.$ Byron Glow$$s returns policy is that veterinarian customers can return therapeutic devices acquired

within fourteen days of the sale for a full refund provided the item is unused. Approximately $2\mathrm{.}5\%$ of

sales are returned for a refund. The group$$s accounting policy for revenue is to book the full price of

all sales at the time sales occur and recognise any refunds at the time items are returned and a refund

is issued to the customer. The average gross profit margin for therapeutic devices is $65\%.$

$10.$ WHS does not have a formalised returns policy due to the nature of the compound medication. Once

opened it cannot be returned for refund.

$11.$ On $15$ June $2024,$ WHS received legal notification that a class action has commenced against the

company. The class action alleges the company was negligent and is seeking $$5,000,000$ in damages

plus costs. The company$$s lawyers have advised the claim against the company appears to be spurious

in nature. The Company denies any wrongdoing, however, to be prudent a provision of $$250,000$ has

been included in the year$-$end financial statements to cover potential legal costs. As the action is in

its early stages, no court dates have been set.

$12.$ On $30$ June $2024$ WHS issued $$250,000$ preference shares which are redeemable on $15$ June $2025$ and

pay a dividend of $10\%$ p$.$a$,$ paid on a quarterly basis. The dividends are cumulative.

$13.$ The company is considering changing its accounting policy in relation to land and buildings to measure

land and buildings at cost$,$ so that all property, plant and equipment is measured at cost from $1$ July

$2024.$

$14.$ The CFO advised they had heard that extra disclosures are required in relation to consolidated

financial statements and has asked you to provide a brief summary as to what the new requirements

are and whether they will affect the preparation of the consolidated financial statements and related

annual report.

$15.$ All amounts are expressed exclusive of GST$.$ GST is not required to be incorporated into the

transactions or adjustments for the purposes of this exercise.