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7/28/2019 CRA nov 2012 ans
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InstituteofCertifiedManagementAccountantsofSriLankaCorporateReporting&Analysis(CRA/ML2302)ManagerialLevel
November2012Examination
SuggestedAnswerScheme
Question 01 (30 marks)
1. 100 x 6 / 12 = 50Cv = 230+50+21 =301NCI = 280x30%= 84
217
Gain (225-217) =8RReserve (10x70%) =7Total gain =15
2. 100- .2(100+200-50)x115=5.750
3.
CPLC Group
Rs. 000
Revenue 88000
Cost of Sales (53000)Gross Profit 35000
Other Income 0
Administrative Expenditure (12000)
Distribution Cost (14000)
Finance cost (3000)
6000
KPLC share 5600x30% 100x30%150 1500
Profit before tax 7500
Income tax (1000)
Profit after tax 6500
Exchange gain 320Total comprehensive income 6820
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4.
B
group NCI
Ppe 36+20+36 92000 invest 18000 FV 4400
GW
6600 equityB
12800
3200investmnts 2,000 reserv 3200 800
Stock 32000 2000 GW 400
Debt 12500 GWNCI 400
Cit 500 FullGW 2400
145600
C
Scap 20000 invest 10000 FV 7000
Res 61600 indire 7200 eq
2560
NCI
14000 equity5440 res
3840contingentconsider 2000
Loan 26000 res 8160 600
liabilities 22000 3600
145600 600
fullgw 4200
ENTIRE 6600
NCI group
FV 11400
investC 1800
reservesB 1200 4800
reserves
c 3200 6800
Areerv 50000
14000 61600
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Question2
1. If the bank has provided a standard loan, no related party disclosure required.
2.
i. Reportable segments are operating segments or aggregations of operating
segments that meet specified criteria:
a) its reported revenue, from both external customers and
intersegment sales or transfers, is 10 per cent or more of the combined
revenue, internal and external, of all operating segments; or
b) the absolute measure of its reported profit or loss is 10 per cent or
more of the greater, in absolute amount, of (i) the combined reported
profit of all operating segments that did not report a loss and (ii) the
combined reported loss of all operating segments that reported a loss;or
c) its assets are 10 per cent or more of the combined assets of all
operating segments.
(ii) Yes.Shouldbeincludedinsegmentresultwhichisthedifferencebetween
segmentrevenueandexpense.
(iii) Itisrequiredtoeliminateasitiswithinthesegment. Outofthesegmentnot
required.
(iv) Itisallowedtoreportasaseparatesegment.SLFRS8.
Question03
1. 2mntobeprovidedimmediately.
2.
i. A financial liability is any liability that is:
a contractual obligation:
o to deliver cash or another financial asset to another entity; or
o to exchange financial assets or financial liabilities with another entity
under conditions that are potentially unfavourable to the entity; or
a contract that will or may be settled in the entitys own equity instruments and is :
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a non-derivative for which the entity is or may be obliged to deliver a variable
number of the entitys own equity instruments; or
o a derivative that will or may be settled other than by the exchange of a
fixed amount of cash or another financial asset for a fixed number of the
entitys own equity instruments.
ii. Yes,Hollandhasanobligationtopayinterestonspecificdates.Hence,itnotanequity
component.
iii. Offsetting Possible Only; if ithas a current right to set off the recognised amounts; andintends either to settle on a net basis, or to realise the asset and settle the liabilitysimultaneously.
iv. Equitycomponent
CF Factor PV
100000 0.6355 63550
10000 0.8928 8928
10000 0.7972 7972
10000 0.7117 7117
10000 0.6355 6355
PVofdebt 93922
proceeds 100000
Equity
portion 6078
Question4
Candidateshouldcalculateatleasttworatiosineachcategory:profitability,liquidityandefficiency.
Thecompany
runs
over
its
capacity,
candidate
should
identify
the
symptoms
in
the
report.
Atleastfourlimitationsofratiosasananalyticaltechniqueexpected.
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Question 5
1. CSR
2. theyprovidemanagement,shareholdersandotheruserswithcomparableinformationfromperiodtoperiod,relatingtotheunderlyingresultsofoperations,capitalmaintenanceand
trendsin
performance;
Theyenablemanagementtomakemorereliabledecisionsoncapitalexpenditureplans,as
thefinancialstatementsaremorerelevant;and
Theybecomemoreusefultointernationalinvestorsandotherusersoffinancialstatements
inthattheyarecomparablewithotherundertakingsinthesameindustry.
3. Governance
4. Effective corporate governance is the need of the era for corporate sector. Past
failures and corporate scams like golden key amply prove this fact, and have
forced regulators to review the existing regulations
The Best Practice on Corporate Governance (ICASL) requires that the Board shouldmaintain a sound system of internal control to safeguard shareholders investments
and the Companys assets. Directors should, at least annually, conduct a review of
the effectiveness system of internal controls, to be able to report to shareholders
This could be made the responsibility of the Audit Committee. Companies, which do
not have an internal audit function, should from time to time review the need for one.
strong internal control would deliver accurate ,complete and timely information to
the investor community and to the public .
2. The costs incurred during the growth of fish, should be written off in that periodas the fair value is not reliable.