SECTION B (60 marks)
Telstra sells Ooyala after $500 million black eye
Max Mason Media & Marketing Editor
Financial Review
UpdatedOct 16, 2018 — 3.44pm,first published at11.52am
Telstra has quietly exited its first move into Silicon Valley, selling video streaming outfit Ooyala, which it bought for more than $500 million and wrote down to a value of zero earlier this year.
Telstra bought Ooyala in two stages in 2012 and 2014, under former boss David Thodey, spending more than $500 million on the US-based technology company. By 2016, it wrote the value of Ooyala down to $246 million and in February 2018 it hit reset, wiping the value of the business down to zero.
"Also as section of our focus on portfolio management we have already announced the restructure of Telstra Ventures and last week we completed the exit of our US-based intelligent video business Ooyala," Telstra chief executive Andy Penn told shareholders at the company's annual general meeting on Tuesday.
…Telstra sold Ooyala via a management buyout but did not disclose the terms of the deal.
https://www.afr.com/business/telecommunications/telstra-sells-ooyala-after-500-million-blackeye-20181016-h16ox5
Assessment tasks:
Assume that you are a summer vacation intern at the Melbourne office of an international accounting firm and that along with some fellow interns you have been assigned to a team to work together to produce a report to the shareholders of Telstra Ltd that:
i. Explains:
· the financial statement reporting by Telstra of its step acquisition of Ooyala back in August 2014 (see Telstra annual report year ended 30 June 2014)
· the financial statement reporting by Telstra of its investment in Ooyala, Videoplaza, and Nativ including the treatment of goodwill on acquisition (see Telstra annual report year ended 30 June 2015) and thereafter in subsequent financial reporting periods (when referred to as the Ooyala Holding Team)
· the financial statement reporting by Telstra of its sale of the Ooyala Holding Team (see Telstra annual report year ended 30 June 2019).
ii. Evaluates the usefulness to users of the above financial statement information.
The report to the shareholders of Telstra should include some background material about Telstra, Ooyala, Videoplaza, Nativ (and thereafter, the Ooyala Holding Team), refer to relevant accounting standards including paragraph numbers as necessary.
Additional guidance
The report will reflect the personal view of the team based on research evidence, theory and original consideration. The report is expected to draw on:
· Australian Accounting Standards
·
DatAnalysis
.
DatAnalysis is a comprehensive data set on all companies listed on the Australian Securities Exchange (ASX). Includes annual reports, corporate history and listing details, cross directorships and committee composition, shareholders’ trading history, takeover details, industry comparisons, price history and graphs, financial data, key events corporate calendar and ASX announcements
· Newspaper and other media reports
· Scholarly articles from academic journals.
The report should include an executive summary. The entire Section B report should not exceed 2500 words (+/-10%) (excluding title page, table of contents, reference list and the executive summary, but including footnotes, endnotes and appendices). A reference list is a
MUST. Please provide a word count on the cover sheet re the Section B report.
To avoid plagiarism, you are required to provide a reference whenever you include information from other sources in your work. Further details regarding plagiarism are available in Part C of the unit outline.
Referencing convention required for this unit is the Swinburne Harvard System. Helpful information on referencing using the Swinburne Harvard System can be found at:
http://www.swinburne.edu.au/lib/studyhelp/harvard_style.html