财务报表课业完成版

1、NANJING UNIVERSITY OF ARONAUTICSAND ASTRONAUTICS CENTREBTEC HND IN BUSINESSASSIGNMENT COVER SHEETNAME OF STUDENT刘必成 LIU Bi ChengREGISTRATION NO. 19083120UNIT TITLEFinancial ReportingASSIGNMENT TITLEASSIGNMENT NO1 of 2NAME OF ASSESSORCHENG KeSUBMISSION DEADLINE 1 November, 2010I, _刘必成 LIU Bi Cheng_ h

2、ereby 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._SignatureDateFOR OFFICIAL USEAssignment Received By: Date: Unit OutcomesOutcomeEvidence for the criteriaFeedbac

3、kAssessors decisionInternal VerificationExplain the regulatory framework for financial reporting1describe the different users of financial statements and their needs1.1explain the legal and regulatory influences on financial statements1.2assess the implications for users1.3describe how different pol

4、icies are dealt with by accounting and reporting standards1.4Prepare financial statements from complete or incomplete records2prepare financial statements for a variety ofbusinesses from a trial balance, making appropriateadjustments2.1prepare financial statements from incomplete records2.2prepare a

5、 consolidated balance sheet and profit and loss account for a simple group of companies2.3Assessment CriteriaPass is achieved by meeting all the requirements defined in the assessment criteria.MeritIdentify and apply strategies to find appropriate solutions. (M1)An effective approach to study and re

6、search used to investigate economic, social and global environment affect selected organisation as well as organisation responsibilities against its stakeholders.Select and apply appropriate techniques.(M2)Students reviewed the relevant theories that are applied to the practical case. Various source

7、s of information used related to set tasks.Present and communicate appropriate findings(M3)An appropriate structure and approach have been used to prepare a report. Present data using a range of methods e.g. tables, diagrammatical and graphical forms.DistinctionUse critical reflection to evaluate ow

8、n work and justify valid conclusions (D1)Creation has been used to generate and justify valid comments based on investigation selected organisation, economic, social and global environment.Take responsibility for managing and organizing activities(D2)Demonstrates substantial investigations have plan

9、ned, managed and organized for selected organisation related to objectives and responsibilities of an organisation as well as its environment. Demonstrate convergent, lateral and creative thinking (D3)An innovative and creative thought has been used to identify mission, objectives and responsibiliti

10、es of selected organisation as well as investigate related economic, social and global environment affects selected organisation. Merit grades awardedM1M2M3Distinction grades awardedD1D2D3Comments by Assessor Overall, youve got: Areas for improvement:ASSESSOR SIGNATURENAME: _DATE: _STUDENT SIGNATURE

11、NAME: _DATE: _FOR INTERNAL USE ONLY VERIFIED: YES NO VERIFIED BY: DATE: On 1 April 2009 Par acquired 75% of Sos equity shares in a share exchange of three shares in Par for every two shares in So. The market prices of Pars and Sos shares at the date of acquisition were$3.20 and $4.50 respectively.In

12、 addition to this Par agreed to pay a further amount on 1 April 2010 that was contingent upon the post-acquisition performance of So. At the date of acquisition Par assessed the fair value of this contingent consideration at $4.2 million, but by 31 March 2010 it was clear that the actual amount to b

13、e paid would be only $2.7 million (ignore discounting).Par has recorded the share exchange and provided for the initial estimate of$4.2 million for the contingent consideration.On 1 October 2009 Par also acquired 40% of the equity shares of Da paying$4 in cash per acquired share and issuing at par o

14、ne $100 7% loan note for every 50 shares acquired in Da. This consideration has also been recorded by Par.Par has no other investments. The following information is relevant:(i)At the date of acquisition the fair values of Sos property, plant and equipment was equal to its carrying amount with the e

15、xception of Sos factory which had a fair value of$2 million above its carrying amount. So has not adjusted the carrying amount of the factory as a result of the fair value exercise. This requires additional annual depreciation of $100,000 in the consolidated financial statements in the post-acquisit

16、ion period.Also at the date of acquisition, So had an intangible asset of $500,000 for software in its statement of financial position. Pars directors believed the software to have no recoverable value at the date of acquisition and So wrote it off shortly after its acquisition.(ii)At 31 March 2010

17、Pars current account with So was$3.4 million (debit).This did not agree with the equivalent balance in Sos books due to some goods-in-transit invoiced at $1.8 million that were sent by Par on 28 March 2010, but had not been received by So until after the year end. Par sold all these goods at cost pl

18、us 50%.(iii)Pars policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose Sos share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest.(iv)Impairment tests were carried out on 31

19、 March 2010 which concluded that the value of the investment in Da was not impaired but, due to poor trading performance, consolidated goodwill was impaired by $3.8 million.(v)Assume all profits accrue evenly through the year.The summarized statements of financial position of the three companies at

20、31 March 2010 are:ParSoDaAssetsNon-current assetsProperty, plant and equipment37,500 24,500 21,000Investments45,000 nil nil82,500 24,50021,000Current assetsInventory10,000 9,0005,000Trade receivables6,5001,5003,000Total assets99,000 35,00029,000Equity and liabilitiesEquityEquity shares of$1 each25,0

21、00 8,0005,000Share premium19,800 nilnilRetained earningsat 1 April 20016,200 16,50015,000for the year ended 31 March 201011,000 1,0006,00072,000 25,50026,000Non-current liabilities7%loan notes 14,5002,000nilCurrent liabilitiesContingent consideration4,200nilnilOther current liabilities8,300 7,500 3,

22、000Total equity and liabilities99,000 35,00029,000Task 1Prepare the consolidated statement of financial position for Par as at 31 March 2010.Consolidated financial statements are financial statements that factor the holding company's subsidiaries into its aggregated accounting figure. It is a re

23、presentation of how the holding company is doing as a group. The consolidated accounts should provide a true and fair view of the financial and operating conditions of the group. Doing so typically requires a complex set of eliminating and consolidating entries to work back from individual financial

24、 statements to a group financial statement that is an accurate representation of operations.In addition,i can make a the consolidated statement of financial position of Par as at 31 March 2010,as follow table: The Consolidated Statement of Financial position of Par as at 31 March 2010$000$000AssetsN

25、on-current assets:Property, plant and equipment63,900Goodwill12,200Investment in associate 13,20089,300Current assetsInventory20,200Trade receivables4,60024,800Total assets 114,100Equity and liabilitiesEquity attributable to owners of the parentEquity shares of $1 each 25,000Share premium 19,800Reta

26、ined earnings 27,50047,30072,300Non-controlling interest 8,400Total equity80,700Non-current liabilities7%loan notes16,500Current liabilitiesContingent consideration 2,700Other current liabilities14,20016,900Total equity and liabilities 114,100Working Paper of Consolidated Statement(unit: $000)Accoun

27、ting TerminologyComputational ProcessAssetsProperty, plant and equipment37,500+24,500+2,000-100=63,900Goodwill16,000-3,800=12,200Investment in associateCash:5,000*40%*4=8,00070% loan notes:5,000*40%*100/50=4,000Profits:6,000*40%*6/12=1,200Investment in associate =8,000+4,000+1,200=13,200Total non-cu

28、rrent assetsTotal non-current assets=Property,plant and equipment+Goodwill+Investment in associate=63，900+12,200+13,200=89,300Inventory10,000+9,000+1,800GIT-600URF=20,00Trade receivables6,500+1,500-3,400(intra-group)=4,600Total current assetsTotal current assets= inventory+trade receivables=20,200+4

29、,600=20,800Total assetsTotal assets=Total non-current assets+Total current assets=89,300+24,800=114,100Equity and liabilitiesEquity shares of $1 each25,000Share premium19,800Retained earnings27,500Total equity attributable to owners of the parentTotal equity attributable to owners of the parent= Equ

30、ity shares of $1 each+ Share premium+ Retained earnings=25,000+19,800+27,500=72,300Non-controlling interest8,400Total equityTotal equity= Total equity attributable to owners of the parent+ Non-controlling interest= 72,300+8,400=80,700Non-current liabilities( 7% loan notes)16,500Contingent considerat

31、ion42,00-1,500=2,700Other current liabilities8,300+7,500-1,600intra-group=14,200Total liabilitiesTotal liabilities= Non-current liabilities( 7% loan notes)+ Current liabilities(Contingent consideration + Other current liabilities)=16,500+2,700+14,200=33,400Total equity and liabilitiesTotal liabiliti

32、es= Total equity+ Total liabilities=80,700+33,400=114,100Task 2An important aspect of the International Accounting Standards Boards Framework for the preparation and presentation of financial statements is that transactions should be recorded on the basis of their substance over their form.Explain w

33、hy it is important that financial statements must reflect the substance of the underlying transactions and describe the features that the one may indicate the substance of a transaction may be different from its legal form.1. The Different Users of Financial Statements and Their NeedsThe users of fi

34、nancial statements include present and potential investors, employees, lenders, suppliers and other trade creditors, customers, governments and their agencies and the public. They use financial statements in order to satisfy some of their different needs for information. These needs include the foll

35、owing:Investors. The providers of risk capital and their advisers are concerned with the risk inherent in, and return provided by, their investments. They need information to help them determine whether they should buy, hold or sell. Shareholders are also interested in information which enables them

36、 to assess the ability of the enterprise to pay dividends.Employees. Employees and their representative groups are interested in information about the stability and profitability of their employers. They are also interested in information which enables them to assess the ability of the enterprise to

37、 provide remuneration, retirement benefits and employment opportunities.Lenders. Lenders are interested in information that enables them to determine whether their loans, and the interest attaching to them, will be paid when due.Suppliers and other trade creditors. Suppliers and other creditors are

38、interested in information that enables them to determine whether amounts owing to them will be paid when due. Trade creditors are likely to be interested in an enterprise over a shorter period than lenders unless they are dependent upon the continuation of the enterprise as a major customer.Customer

39、s. Customers have an interest in information about the continuance of an enterprise, especially when they have a long-term involvement with, or are dependent on, the enterprise.Governments and their agencies. Governments and their agencies are interested in the allocation of resources and, therefore

40、, the activities of enterprises. They also require information in order to regulate the activities of enterprises, determine taxation policies and as the basis for national income and similar statistics.Public. Enterprises affect members of the public in a variety of ways. For example, enterprises m

41、ay make a substantial contribution to the local economy in many ways including the number of people they employ and their patronage of local suppliers. Financial statements may assist the public by providing information about the trends and recent developments in the prosperity of the enterprise and

42、 the range of its activities.While all of the information needs of these users cannot be met by financial statements, there are needs which are common to all users. As investors are providers of risk capital to the enterprise, the provision of financial statements that meet their needs will also mee

43、t most of the needs of other users.The management of an enterprise has the primary responsibility for the preparation and presentation of the financial statements of the enterprise. Management is also interested in the information contained in the financial statements even though it has access to ad

44、ditional management and financial information that helps it carry out its planning, decision-making and control responsibilities. Management has the ability to determine the form and content of such additional information in order to meet its own needs. The reporting of such information, however, is

45、 beyond the scope of this framework. Nevertheless, published financial statements are based on the information used by management about the financial position, performance and changes in financial position of the enterprise.1.1.The Definition of Financial StatementA financial statement (or financial

46、 report) is a formal record of the financial activities of a business, person, or other entity. In British Englishincluding United Kingdom company lawa financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants1.For a busin

47、ess enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis,for example:l Balance sheet: als

48、o referred to as statement of financial position or condition, reports on a company's assets, liabilities, and Ownership equity at a given point in time. l Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and

49、 profits over a period of time. Profit & Loss account provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. l Statement of retained earnings: explains the changes in a company's retained earnings over the rep

50、orting period. l Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities. For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and management d

51、iscussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.1.2.The Objective of Financial StatementsThe objective of financi

52、al statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.Financial statements prepared for this purpose meet the common needs of most users. However, finan

53、cial statements do not provide all the information that users may need to make economic decisions since they largely portray the financial effects of past events and do not necessarily provide non-financial information.Financial statements also show the results of the stewardship of management, or t

54、he accountability of management for the resources entrusted to it. Those users who wish to assess the stewardship or accountability of management do so in order that they may make economic decisions; these decisions may include, for example, whether to hold or sell their investment in the enterprise

55、 or whether to reappoint or replace the management1.3.A Brief List of Users of Financial Statementsl Existing equity investors and lenders, to monitor their investments and to evaluate the performance of management. l Prospective equity investors and lenders, to decide whether or not to invest. l In

56、vestment analysts, money managers, and stockbrokers, to make buy/sell/hold recommendations to their clients. l Rating agencies (such as Moody's, Standard & Poor's, and Dun & Bradstreet), to assign credit ratings. l Major customers and suppliers, to evaluate the financial strength and staying power of the company as a dependable resource for their business. l Labor unions, to