Accounting and Restructuring provisions

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Questions 3
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Tooth Ltd. acquires Nail Ltd. effective 1 March 2020. At the date of acquisition,management has developed and the board has approved the main features of the restructuring plan and based on available information, best estimates of the costs have been made. As at the date of acquisition ,a public announcement of Tooth Ltd.’s intentions has been made and relevant parties have been informed of the planned closure. Within a week of the acquisition being affected, management commences the process of informing unions,lessors,institutional investors and other key shareholders of the board characteristics of its restructuring is developed within 3 months and implemented soon thereafter.
Required
a) Explain the accounting for restructuring provisions with reference to AASB137.
b) Under AASB137, Should Tooth Ltd. create a provision for restructuring as part of its acquisition accounting entries?
c) How would your answer change if all the circumstances are the same as those above except that Tooth Ltd. decides that, instead of closing a division of Nail Ltd. it would close down one of its own facilities?
Presentation: 1000 words (+/- 10%); short report format. title page, executive summary, table of contents, appropriate headings and sub-headings, recommendations/findings/conclusions, n text referencing and reference list (Harvard – Anglia style), attachments if relevant.Single spaced,font Times New Roman 12pt, Calibri 11pt or Arial 10pt. In text referencing and reference list are excluded from the word count.
Marking Guide:
Research – extent and application 30%
Analysis 30%
Recommendations 20%
Communication 20%
Total mark will be scaled to a mark out of 20 subject marks

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