UNIVERSITY OF TECHNICAL EDUCATION

BTEC HND IN BUSINESS (MANAGEMENT)

ASSIGNMENT COVER SHEET

NAME OF STUDENT
REGISTRATION NO.
UNIT TITLE Unit 10: Financial Reporting
ASSIGNMENT TITLE Financial Statements Regulatory Framework & Interpretation
ASSIGNMENT NO 2 of 2
NAME OF ASSESSOR NGUYEN KIM THU
SUBMISSION DEADLINE 25th February 2011

I, __________________________ hereby confirm that this assignment is my own work and not
copied or plagiarized from any source. I have referenced the sources from which information is
obtained by me for this assignment.

________________________________ _________________________

Signature Date

----------------------------------------------------------------------------------------------------------------
FOR OFFICIAL USE
Assignment Received By: Date:

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Unit Outcomes

Evidence for Assessor’s Internal

Outcome Feedback
the criteria decision Verification

Describe the
different users
of financial a
statements and
their needs

Explain the
legal and
regulatory
Explain the b
influences on
regulatory financial
framework for statements
financial
reporting
Assess the
(1) implications for c
users

Describe how
different policies
are dealt with by
d
accounting and
reporting
standards

Prepare
financial Prepare a
statements consolidated
from balance sheet
complete or and profit and c
incomplete loss account for
records a simple group
of companies
(2)

Calculate
accounting
ratios to assess
a
the performance
and position of
Interpret
a business
financial
statements Prepare a report
incorporating
(4) and interpreting
accounting b
ratios, including
suitable
comparisons

Merit grades awarded M1 M2 M3

Distinction grades awarded D1 D2 D3

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 Evidence for Assessor’s Internal
Outcome Feedback
the criteria decision Verification

Comments by Assessor - Common Skills

A B C D E F G

Assignment
( ) Well-structured; Reference is done properly / should be done (if any)

Overall, you’ve

Areas for improvement:

ASSESSOR SIGNATURE DATE / /

NAME: .........................................................................................
(Oral feedback was also provided)
LEADER/MEMBERS’ SIGNATURE DATE / /

NAME :..............................................................................
FOR INTERNAL USE ONLY
VERIFIED YES NO

DATE : ...........................................................................
VERIFIED BY : ...........................................................................
NAME : ...........................................................................

COMMON SKILLS & COMPETENCIES ASSESSED (indicated by X)

A. MANAGING & DEVELOPING SELF D. MANAGING TASKS & SOLVING PROBLEMS

1. Managing own roles & responsibilities 12. Use information sources X
2. Manage own time in achieving objectives X 13. Deal with a combination of routine & non-routine tasks
3. Undertakes personal and career development 14. Identify & solve routine & non-routine problems
4. Transfer skills gained to new/changing situations & contexts
B. WORKING WITH & RELATING TO OTHERS E. APPLYING NUMERACY
5. Treat others beliefs and opinions with respect 15. Applying numerical skills and techniques X
6. Relate & interact effectively with individuals & groups
7. Work effectively as a team member F. APPLYING TECHNOLOGY
C. COMMUNICATING 16. Use a range of technological equipment and systems
8. Receive and respond to a variety of information X G. APPLYING DESIGN AND CREATIVITY
9. Present information in a variety of visual forms 17. Applying a range of skills and techniques to develop a
variety of ideas in the creation of new / modified products,
10. Communicate in writing X services or situations
11. Participate in oral & no-verbal communication 18. Use a range of thought processes X

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SCENARIO

Your team is a part of a financial consultancy firm that is providing advice and
assistance to clients on financial accounting and general business issues. You have
been asked by Director of Finance in your company to prepare an analytical review
of the financial position and reporting of a well-known Merchandising or Service
Company located in Vietnam.

Task 1

The report (for Director of Finance) should address at least the following:

 Describe the different users (Stakeholders) of financial statements and their

needs (1 a)

 Explain the legal and regulatory influences on financial statements preparation

like Companies Act etc. (1 b)

 Assess the implications for users of financial statements (1 c)

 Describe how different policies are dealt with by accounting and reporting
standards (FRS, IASB, SSAP, GAAP and ASB) (1 d)

 Calculate accounting ratios (Solvency, Profitability, Capital Gearing, Dividend

Yield, Assets) (4 a)

 Prepare a report incorporating and interpreting accounting ratios, compare

against the previous year, regional and also local competitors (4 b)

Task 2

You have been asked to prepare the consolidated financial statements - You should
work to the nearest $'000. The summarised draft balance sheets of a group at 31
December 20X4 were:

P S P S
$’000 $’000 $’000 $’000
Sundry assets 106 34,5 Share Capital($1 ord.) 100 20
Investment in S Accumulated profits 22 6.5
(share at cost) 27 Payables 11 8
133 34,5 133 34,5

Prepare the consolidated balance sheet at 31 December 20X4 for each of the
following alternatives, amortising goodwill in all cases over five years. (3 c)

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 (a) P acquired all the shares in S on 1 January 20X4, when S had accumulated
profits of $6,000.
(b) as in (a) above, except that only 16,000 ordinary shares in S were purchased
for $27,000
(c) Facts as in above, except that only 16,000 ordinary shares in S were
purchased for 27,000 on 1 January 20X4. Property which was not depreciated
was estimated by the directors of P to be undervalued by $5,000 on 1 January
20X4.

Task 3

The draft income statements for the year ended 31 March 20X7 of the companies
in a group as follows:
Tyndale Wycliffe Luther
$ $ $
Sales revenue 216,300 24,500 126,000
Cost of sales 136,269 15,372 79,380
Gross Profit 80,031 9,028 46,620
Distribution costs (21,630) (2,440) (12,600)
Income from shares in group companies 7,512 _____ ______
Net profit before tax 65,913 6,588 34,020
Tax 28,119 3,172 16,380
Net profit after tax 37,794 3,416 17,640
Dividends paid 20,000 1,952 10,080
Retained profit 17,794 1,464 7,560
Accumulated profits 36,728 7,076 23,940

The history of the group is as follows:

 Tyndale bought 75% of the ordinary shares (the only type) in Wycliffe
seven years ago when that company’s reserves amounted to $5,124.
Goodwill of 5,000 arose on the acquisition.
 Luther has an issued share capital of 100,000 ordinary shares of $1 each.
Tyndale purchased 60,000 of these two years ago when the balance on
Luther reserves was 16,380. Goodwill of $10,000 arose on the acquisition.

Goodwill is amortised over five years from the date of acquisition with a full year’s
charge in the year of acquisition. Prepare the consolidated income statement for the
year ended 31 March 20X7. (3 c)

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Notes:
 a key point summary of conclusions / recommendations;

 graphical illustration, where appropriate;

 a bibliography of sources of information used and references to texts or other

material drawn from.

Detailed tables, extracts or copies of financial information, which should include a

copy of the relevant financial statements, should be put in the appendices. You
should refer to them in the body of the report.

GRADING

Pass is achieved by meeting all the requirements defined in the assessment

criteria. (Refer page 2 of the assignment brief)

Merit Identify and apply strategies to find appropriate solutions (M1)

Characteristics / Possible Evidence – an effective approach to study and
researched to explain various regulatory framework and legislation
implications on financial statements preparation.

Select and apply appropriate techniques. (M2)

Characteristics / Possible Evidence – Apply range of methods and select
techniques to interpret financial statements and also prepare consolidate
financial statements in task 2.

Present and communicate appropriate findings (M3)

Characteristics / Possible Evidence – The work is presented in a
professionally-written report with appropriate structure and approach with the
use of various methods of presentation.

Distinction Use critical reflection to evaluate own work and justify valid conclusions (D1)
Characteristics / Possible Evidence – evaluate and synthesize relevant
theories and techniques to generate and justify valid conclusions based on
interpretation of financial statements with suitable comparison like against
industry, previous period and competitors.

Take responsibility for managing and organising activities (D2)

Characteristics / Possible Evidence – show an individual approach in
presenting and communicating work coherently using language in the
financial context.

Demonstrate convergent, lateral, and creative thinking (D3)

Characteristics / Possible Evidence – show an in-depth analysis of the
company, its performance by convergent and lateral thinking through the ratio
analysis

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Common Skills Grading

To achieve a Pass grade the group must, show manage own time in achieving objectives,
and demonstrate good written communication skills through a professionally written report.
You also show some evidence of willing to try new approaches related to given scenario.

To achieve a Merit grade the group must, show all deadlines met, all points of view are
considered equally, clear and appropriate response to a variety of information, use of
different communication methods, as well as good understanding of the relevance of various
thought processes in creativity.

To achieve a Distinction grade the group must, show excellent quality of work produced on
time, positive attempt made to build mutual understanding, outstanding quality of
presentation, as well as identify the need for changing thought processes within creative
activity.

PRESENTATION

1. The assignment should have a cover page that includes the assignment title,
assignment number, course title, module title, Lecturer/tutor name and
student’s name. Attach all the pages of assignment brief/cover sheet with your
report and leave them blank for official use.

2. Ensure that authenticity declaration has been signed.

3. This is a group assignment.

4. Content sheet with a list of all headings and page numbers.

5. A fully typed up professionally presented report document. Use 12 point Arial

or Times New Roman script.

6. Your assignment should be word-processed and should not exceed 3,000

words in length.

7. Use the Harvard referencing system.

8. Exhibits/appendices are outside this limit.

9. The assignment should be not contain a bibliography – but should contain a

list of any references used in the assignment.

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NOTES TO STUDENTS FOR SUMMISSION

 Check carefully the submission date and the instructions given with the
assignment. Late assignments will not be accepted.
 Ensure that you give yourself enough time to complete the assignment by the
due date.
 Do not leave things such as printing to the last minute – excuses of this nature
will not be accepted for failure to hand-in the work on time.
 You must take responsibility for managing your own time effectively.
 If you are unable to hand in your assignment on time and have valid reasons
such as illness, you may apply (in writing) for an extension.
 Failure to achieve a PASS grade will results in a REFERRAL grade being
given.
 Take great care that if you use other people’s work or ideas in your
assignment, you properly reference them in your text and any bibliography.
 NOTE: If you are caught plagiarizing, you could have your grade
reduced to zero, or at worst, you could be excluded from the course.