Financial Advisers Ltd (Advisers) provides financial services to a range of clients. It also has a range of investments in complementary businesses.

The Chief Financial Officer (CFO) is concerned whether consolidated financial statements should be prepared for the following two investments:

1. Computing Services Pty Ltd (Computing) 30% of the shares are owned by the managing director and 70% by Shipton Holdings Ltd. (Shipton). 50% of Shipton is owned by Advisers and the remaining 50% by employees of associated companies.

2. Advisers has a 35% interest in Bellinger Travel Pty Ltd (Bellinger). The remaining 65% is owned by the managing director of Bellinger. The majority of Bellinger's business is with Advisers or an associated company.

Advisers has two directors on the board of Bellinger but all operational decisions are made by the managing director.

Required

Write a report covering the following in relation to the above data:

1. What guidance do the accounting standards and pronouncements provide to the CFO?

2. How are relationships within a group determined?

3. Advise the CFO whether, in your opinion, consolidated statements are required and justify your opinion.

INFORMATION

Your research essay must be submitted at the end of your lecture in week 10. Penalties will apply for late submission.

The following matters should be given particular attention:

1. Writing assignments must not exceed the word counts indicated. Double space your pages, use a 12-pt Times New Roman font, use 2 cm margins on all four sides of your page.

2. Your essay must include an abstract/synopsis, introduction, essay body that clearly addresses the problem areas, a conclusion and a properly referenced bibliography. (refer to the research report marking rubric for further guidance)

3. Evidence of extensive research beyond the prescribed text is required. Ensure these are referenced appropriately in your bibliography. Refer to the statement regarding plagiarism.

4. NO extensions will be granted unless supported by appropriate documentation prior to the due date.

5. This assignment must be handed in for successful completion of the course and will count 20 marks towards the final mark.

6. The word count for the research essay is 2000 words. Please refer to the Research Report Marking Rubric for the specific allocation of word count for each specific section of your research essay (refer point 2 above).

7. The research essay is to be conducted in groups of two. Students do not have the option to extend or reduce the size of the group. If the class has an odd number of students then one student must undertake the assignment on their own.