(c) (i) Using ONLY the above information, assess the competitive position of Diverse Holdings Plc.
(7 marks)
第1题:
(b) What are the advantages and disadvantages of using a balanced scorecard to better assess the overall
performance of Lawson Engineering? (8 marks)
第2题:
(b) (i) Discusses the principles involved in accounting for claims made under the above warranty provision.
(6 marks)
(ii) Shows the accounting treatment for the above warranty provision under IAS37 ‘Provisions, Contingent
Liabilities and Contingent Assets’ for the year ended 31 October 2007. (3 marks)
Appropriateness of the format and presentation of the report and communication of advice. (2 marks)
(b) Provisions – IAS37
An entity must recognise a provision under IAS37 if, and only if:
(a) a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event)
(b) it is probable (‘more likely than not’), that an outflow of resources embodying economic benefits will be required to settle
the obligation
(c) the amount can be estimated reliably
An obligating event is an event that creates a legal or constructive obligation and, therefore, results in an enterprise having
no realistic alternative but to settle the obligation. A constructive obligation arises if past practice creates a valid expectation
on the part of a third party. If it is more likely than not that no present obligation exists, the enterprise should disclose a
contingent liability, unless the possibility of an outflow of resources is remote.
The amount recognised as a provision should be the best estimate of the expenditure required to settle the present obligation
at the balance sheet date, that is, the amount that an enterprise would rationally pay to settle the obligation at the balance
sheet date or to transfer it to a third party. This means provisions for large populations of events such as warranties, are
measured at a probability weighted expected value. In reaching its best estimate, the entity should take into account the risks
and uncertainties that surround the underlying events.
Expected cash outflows should be discounted to their present values, where the effect of the time value of money is material
using a risk adjusted rate (it should not reflect risks for which future cash flows have been adjusted). If some or all of the
expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement should be
recognised as a separate asset when, and only when, it is virtually certain that reimbursement will be received if the entity
settles the obligation. The amount recognised should not exceed the amount of the provision. In measuring a provision future
events should be considered. The provision for the warranty claim will be determined by using the expected value method.
The past event which causes the obligation is the initial sale of the product with the warranty given at that time. It would be
appropriate for the company to make a provision for the Year 1 warranty of $280,000 and Year 2 warranty of $350,000,
which represents the best estimate of the obligation (see Appendix 2). Only if the insurance company have validated the
counter claim will Macaljoy be able to recognise the asset and income. Recovery has to be virtually certain. If it is virtually
certain, then Macaljoy may be able to recognise the asset. Generally contingent assets are never recognised, but disclosed
where an inflow of economic benefits is probable.
The company could discount the provision if it was considered that the time value of money was material. The majority of
provisions will reverse in the short term (within two years) and, therefore, the effects of discounting are likely to be immaterial.
In this case, using the risk adjusted rate (IAS37), the provision would be reduced to $269,000 in Year 1 and $323,000 in
Year 2. The company will have to determine whether this is material.
Appendix 1
The accounting for the defined benefit plan is as follows:
第3题:
(b) Explain how the use of SWOT analysis may be of assistance to the management of Diverse Holdings Plc.
(3 marks)
第4题:
(b) Explain how the adoption of residual income (RI) using the annuity method of depreciation might prove to
be a superior basis for the management incentive plan operated by NCL plc.
(N.B. No illustrative calculations should be incorporated into your explanation). (4 marks)
第5题:
(c) Using the information contained in Appendix 1.2, compare the performance of HLP and MAS incorporating
relevant percentage and ratio statistics under the following headings:
(i) Competitiveness; (5 marks)
第6题:
(c) Using sensitivity analysis, estimate by what percentage the life cycle of the Snowballer would need to change
before the recommendation in (a) above is varied. (4 marks)
第7题:
(b) Discuss the statements of the operational manager of Bonlandia and assess their implications for SSH.
(4 marks)
第8题:
(b) Using the unit cost information available and your calculations in (a), prepare a financial analysis of the
decision strategy which TOC may implement with regard to the manufacture of each product. (6 marks)
第9题:
(iii) Identify and discuss an alternative strategy that may assist in improving the performance of CTC with
effect from 1 May 2009 (where only the products in (a) and (b) above are available for manufacture).
(4 marks)
第10题:
(ii) From the information provided above, recommend the matters which should be included as ‘findings
from the audit’ in your report to those charged with governance, and explain the reason for their
inclusion. (7 marks)
第11题:
When must the Master of a vessel log the position of load line marks in relation to the surface of the water in the Official Logbook?
A.Once a day
B.At the change of every watch
C.Only when in fresh or brackish water
D.Prior to getting underway
第12题:
buoys close at hand
fixed known objects on shore
buoys at a distance
All of the above
第13题:
(b) Using the information provided in the case scenario, strategically evaluate the performance of the company
up to 2004, indicating any areas of particular concern. (20 marks)
第14题:
(c) Using information from the case, assess THREE risks to the Giant Dam Project. (9 marks)
第15题:
(ii) Explain THREE strategies that might be adopted in order to improve the future prospects of Diverse
Holdings Plc. (6 marks)
第16题:
(b) Using the information contained in Appendix 1.1, discuss the financial performance of HLP and MAS,
incorporating details of the following in your discussion:
(i) Overall client fees (total and per consultation)
(ii) Advisory protection scheme consultation ‘utilisation levels’ for both property and commercial clients
(iii) Cost/expense levels. (10 marks)
(ii) As far as annual agreements relating to property work are concerned, HLP had a take up rate of 82·5% whereas MAS
had a take up rate of only 50%. Therefore, HLP has ‘lost out’ to competitor MAS in relative financial terms as regards
the ‘take-up’ of consultations relating to property work. This is because both HLP and MAS received an annual fee from
each property client irrespective of the number of consultations given. MAS should therefore have had a better profit
margin from this area of business than HLP. However, the extent to which HLP has ‘lost out’ cannot be quantified since
we would need to know the variable costs per consultation and this detail is not available. What we do know is that
HLP earned actual revenue per effective consultation amounting to £90·90 whereas the budgeted revenue per
consultation amounted to £100. MAS earned £120 per effective consultation.
The same picture emerges from annual agreements relating to commercial work. HLP had a budgeted take up rate of
50%, however the actual take up rate during the period was 90%. MAS had an actual take up rate of 50%. The actual
revenue per effective consultation earned by HLP amounted to £167 whereas the budgeted revenue per consultation
amounted to £300. MAS earned £250 per effective consultation.
There could possibly be an upside to this situation for HLP in that it might be the case that the uptake of 90% of
consultations without further charge by clients holding annual agreements in respect of commercial work might be
indicative of a high level of customer satisfaction. It could on the other hand be indicative of a mindset which says ‘I
have already paid for these consultations therefore I am going to request them’.
(iii) Budgeted and actual salaries in HLP were £50,000 per annum, per advisor. Two additional advisors were employed
during the year in order to provide consultations in respect of commercial work. MAS paid a salary of £60,000 to each
advisor which is 20% higher than the salary of £50,000 paid to each advisor by HLP. Perhaps this is indicative that
the advisors employed by MAS are more experienced and/or better qualified than those employed by HLP.
HLP paid indemnity insurance of £250,000 which is £150,000 (150%) more than the amount of £100,000 paid by
MAS. This excess cost may well have arisen as a consequence of successful claims against HLP for negligence in
undertaking commercial work. It would be interesting to know whether HLP had been the subject of any successful
claims for negligent work during recent years as premiums invariably reflect the claims history of a business. Rather
worrying is the fact that HLP was subject to three such claims during the year ended 31 May 2007.
Significant subcontract costs were incurred by HLP during the year probably in an attempt to satisfy demand and retain
the goodwill of its clients. HLP incurred subcontract costs in respect of commercial properties which totalled £144,000.
These consultations earned revenue amounting to (320 x £150) = £48,000, hence a loss of £96,000 was incurred
in this area of the business.
HLP also paid £300,000 for 600 subcontract consultations in respect of litigation work. These consultations earned
revenue amounting to (600 x £250) = £150,000, hence a loss of £150,000 was incurred in this area of the business.
In contrast, MAS paid £7,000 for 20 subcontract consultations in respect of commercial work and an identical amount
for 20 subcontract consultations in respect of litigation work. These consultations earned revenue amounting to
20 x (£150 + £200) =£7,000. Therefore, a loss of only £7,000 was incurred in respect of subcontract consultations
by MAS.
Other operating expenses were budgeted at 53·0% of sales revenue. The actual level incurred was 40·7% of sales
revenue. The fixed/variable split of such costs is not given but it may well be the case that the fall in this percentage is
due to good cost control by HLP. However, it might simply be the case that the original budget was flawed. Competitor
MAS would appear to have a slightly superior cost structure to that of HLP since its other operating expenses amounted
to 38·4% of sales revenue. Further information is required in order to draw firmer conclusions regarding cost control
within both businesses.
第17题:
(b) Using sensitivity analysis, estimate by what percentage each of the under-mentioned items, taken separately,
would need to change before the recommendation in (a) above is varied:
(i) Initial outlay;
(ii) Annual contribution. (4 marks)
第18题:
(ii) Suggest THREE other performance measures (not applied in (i)) which might be used to assess the
customer perspective of the balanced scorecard of GER. (3 marks)
第19题:
(b) Analyse THREE potential problems, based solely on the information provided above, that TMC might
encounter in the acquisition of CBC. (5 marks)
第20题:
(ii) Comment on the figures in the statement prepared in (a)(i) above. (4 marks)
第21题:
(b) Using the information provided, state the financial statement risks arising and justify an appropriate audit
approach for Indigo Co for the year ending 31 December 2005. (14 marks)
第22题:
A. permits only the 10.0.0.0/8 prefix to be advertised to the 10.1.1.1 neighbor
B. marks all prefixes received fro m the 10.1.1.1 neighbor with a MED of 200
C. marks the 10.0.0.0/8 prefix advertised to the 10.1.1.1 neighbor with a MED of 200
D. permits only the 10.0.0.0/8 prefix to be received from the 10.1.1.1 neighbor
E. marks all prefixes advertised to the 10.1.1 .1 neighbor with a MED of 200
F. marks the 10.0.0.0/8 prefix received from the 10.1.1.1 neighbor with a MED of 200
第23题:
A vessel’s position should be plotted using bearings of ______.
A.buoys close at hand
B.fixed known objects on shore
C.buoys at a distance
D.All of above