ACCA国际注册会计师P4真题答案整理

1.Chrysos Co(a)what a reverse takeover involvesgain a listing without initial public offering (IPO)merges with a listed ‘shell’ companyinitially purchases equity sharesthen issues new equity sharesthereby gain a listingAdvantages relative to an IPOpleted much quicker2.cheaper3.potential benefits of going publicDisadvantages relative to an IPO1.hidden liabilities2.original shareholders sell their shares immediately3.cannot develop the necessary expertise and knowledge of listing rules and regulations4.not obtain a sufficient analyst coverage and investor following(b)Report to the board of directors (BoD), Chrysos CoThis report provides extracts from the financial positionIt also contains an explanation of the process usedFinally, the report discussesIt is recommended management buy-outreceive $3,289m (appendix one)Extract of Chrysos Co’s financial position following the restructuring programmeEstimate of Chrysos Co’s equity value following the restructuring programmewill be just over $46 billion(appendix three).Process undertaken in determining Chrysos Co’s equity valuea growth rate of 4% on cash flows in perpetuitydiscounted at Chrysos Co’s cost of capital (appendix two)profit before depreciation and taxdeducting the depreciation and taxationbank loan debt is then deducted (appendix three)Assumptions made in determining Chrysos Co’s equity valueungeared cost of equityModigliani and Miller’s proposition 2accurate estimate of the free cash flows (appendix three)changes in working capital are reckoned to be immaterialDepreciation is assumed to be the same as the capital needed for reinvestment purposescash flows will grow in perpetuity over-optimisticImpact of the restructuring programme on Chrysos Co and on the venture capital organisations (VCOs) venture capital organisations (VCOs)the proportion of the VCOs’ equity share capital will increase to 40%the share of the equity value increase by $9,229m,which is 77·5% more than the total of the value of bonds cancelled and extra payment made (appendix four) the value of their investment has increased substantiallyfeasibility studyon the annual growth rate in cash flows of 4%and the assumption of growth in perpetuitythe extent of additional value created indicate the impact is positiveChrysos Coraise extra debt financejust under $9,600m of possible debt finance which could be accessedraise just under an extra $7,800m debt fundinghave $1,439 million in net cash available from the sale of the machinery parts manufacturing business unit.given that the company has access to an extra $7,800m debt funding to expand its investmentit is likely that the restructuring programme will be beneficialrecommended tries to determine its current equity value and comparesshareholder groups need to be satisfiedabout the potential negative impact of these situationsagainst the potential additional benefitsbefore proceeds with the programme.Conclusioncreates an opportunity for Chrysos Co to have access to extra fundingThe VCOs are likely to benefit financially as long as they are satisfied about the assumptionsHowever, Chrysos Co will need to ensure thatall equity holder groups are satisfied with the change in their respective equity holdings.Report compiled by:Date:AppendicesAppendix One: Unbundling the manufacturing business unitOption 1: Sale of assetsNet proceeds to Chrysos Co from net sale of assets of the manufacturing business unit are $3,102 million. Option 2: Management buy-outProfit before depreciation, interest and taxDepreciation (12% x 20% x ($7,500m + $5,400m))Tax (18% x $530m)Cash flowsEstimated value = ($435m x 1·08)/0·10 = $4,698mAmount payable to Chrysos Co = 70% x $4,698m = $3,289moption 2marginally betterAppendix Two: Calculation of cost of equity and cost of capitalChrysos Co, estimate of cost of equity (Ke) and cost of capital (CoC)Ke = Modigliani and Miller Proposition 2 (with tax)CoC = The weighted average cost of capitalAppendix Three: Estimate of valueProfit before depreciation and taxDepreciation (12% x ($6,000m + $5,520m)) (1,382)Tax (18% x $4,498m)Cash flowsCost of capital to be used in estimating Chrysos Co’s value is 12% (appendix two) Estimated corporate value =The Growth ModelEstimated equity value = corporate value – debtAppendix Four: Value created for VCOsValue attributable to the VCOsValue from increased equity ownership (this has doubled from 20% to 40%)Value of unsecured bonds foregone by the VCOsAdditional capital invested by the VCOsTotal of additional capital invested and value of bonds forgoneAdditional value 77·5% (or $4,029m)(c)As a private company,Representatives from each groupsdecisions will be made after agreement from all representativesno single stakeholder group holds primacy over any other groupOnce listedhave a large and diverse range of equity shareholderspressure to engage in value creating activitythe equity shareholders’ needs will hold primacy over the other stakeholder groups the power of the supervisory board will diminish as a resul3 Buryecs Co(a)currency swaptaking out a loan in €making an arrangement with a counterparty in Wirtoniawhich takes out a loan in $pay the interest on the counterparty’s loanand vice versaAdvantagesmatch the income,reducing foreign exchange riskreverse the swap by exchanging with the other counterpartyOther methods of hedging risk may be less certaincheaper than other methods of hedgingchange debt profile,diversify risk and take advantage of probable lower future interest ratesDrawbackscounterparty may default,pay interest in its currency,reduced by obtaining a bank guaranteenot worthwhile if the exchange rate is unpredictableexchange rates largely determined by inflation ratespredicted inflation rate in Wirtonia is not stableInflation is increasing in Wirtoniainterest rates will increase as a result,increasing Buryecs Co’s finance costs.does not hedge the whole amountAnother method hedge the additional receipt in Year 3 and the receipts in the intervening yearsexchange controls, no receipt at the end of Year 3(b) (i)Gain on swapBank feeGain on swap after bank feeThe swap arrangement will work as follows:AdvantageNet resultAfter paying the 30 point basis fee, Buryecs Co will effectively pay interest at the bank rate – 0·3% and benefit by 90 basis points or 0·9%.The counterparty will effectively pay interest at 5·2% and benefit by 60 basis points or 0·6%.(ii)Using the purchasing power parity formula to calculate exchange rates:S1 = S0 x (1 + h c)/(1 + h b)At Year 3, $5,000 million will be exchanged at the original spot rate as per the agreement and the remaining inflows will be exchanged at the Year 3 rate.Swap translated at 0·1430Amount not covered by swap translated at 0·1315Cash flows in home countryDiscount factorPresent valueThe net present value of the project is €185 million, indicating that it should go ahead.However, the value is dependent on the exchange rate, which is worsening for the foreign income.also uncertainties about the variability of returns during the three yearsin excess of their risk appetite and decline the opportunity(c)Receipt using swap arrangement = €715m + €329m = €1,044mReceipt if transaction unhedged = $7,500m x 0·1315 = €986mPredicted exchange rate at year 3 is €0·1315 = $1 or $7·6046 = €1OptionsBuy $ put options as receiving $$7·75 exercise priceDo not exerciseNet receipt = €986m – (1·6% x $7,500m x 0·1430) = €969m$7·25 exercise priceExerciseReceipt from government = $7,500m/7·25 = €1,034mNet receipt = €1,034m – (2·7% x $7,500m x 0·1430) = €1,005mThe $7·25 option gives a better result than not hedging, given the current expectations of the exchange rate. However, it gives a worse result than the swap even before the premium is deducted, because of the exchange rate being fixed on the swap back of the original amount paid.These calculations do not take into account possible variability of the finance costs associated with the swap, caused by swapping into floating rate borrowing.1 Morada Co(a)how business risk and financial risk are relatedengage in some risky activities to generate returns in excess of the risk free rate of return exposed to differing amounts of business and financial riskBusiness riskdepends on the decisions a business makes with respect to the services and products it offers consists of the variability in its profitsFinancial riskrelates to the volatility of earnings due to the financial structure of the businessthe shareholders or owners may not want to bear risk beyond an acceptable levelrisk management strategyrisk identification, assessingmeasuring through predicting, analysing and quantifying itwhich risks to assume, avoid, retain and transfernot aim to avoid all riskscontrollability, frequency and severity of the riskeliminate or reduce some risks through risk transferRisk mitigation is the process of transferring risksRisk diversification is a process of risk reduction(b)Report to the board of directors (BoD), Morada CoThis report provides a discussion onThe main assumptions made in drawing up the estimates will also be explained.The report concludes by recommendingDiscussionThe table belowthe cost of equity and the cost of capital (appendix 1)the forecast earnings after tax for the coming year (appendix 2)comparison purposes, figures before any changestax shield is reduced significantly due to the lower amount of debt borrowinghigher business riskmore than override the lower cost of debtthe benefit of the tax shield is also almost eroded by the increase in the cost of debtas a percentage of non-current assetsUnder the first director’s proposalUnder the second director’s proposalAssumptions1.weighted average of the asset betas2. share price not changing3. the current assets will change due to changes in the profit after tax figureRecommendationIt is recommended thatThe second results ina lower return on investmentand a virtually unchanged cost of capitalfirstincrease the return on investmentbut higher cost of capitalreduce risk, not achievedcaveatassumptions made not reasonable, reduce the usefulness of the analysisReport compiled by:Date:。

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2018年12月ACCA考试P4高级财务管理真题及标准答案

2018骞?2鏈圓CCA鑰冭瘯P4楂樼骇璐㈠姟绠＄悊鐪熼(鎬诲垎锛?00.00锛屽仛棰樻椂闂达細195鍒嗛挓)涓€銆佹渚嬪垎鏋愰(鎬婚鏁帮細0锛屽垎鏁帮細0.00)Section A(鎬婚鏁帮細1锛屽垎鏁帮細50.00)Around seven years ago, Opao Co, a private conglomerate company involved in many different businesses, decided to obtain a listing on a recognised stock exchange by offering a small proportion of its equity shares to the public. Before the listing, the company was owned by around 100 shareholders, who were all closely linked to Opao Co and had their entire shareholding wealth invested in the company. However, soon after the listing these individuals started selling their shares in Opao Co, and over a two-year period after the listing, its ownership structure changed to one of many diverse individual and institutional shareholders.As a consequence of this change in ownership structure, Opao Co’s board of directors (BoD) commenced an aggressive period of business reorganisation through portfolio and organisational restructuring. This resulted in Opao Co changing from a conglomerate company to a company focusing on just two business sectors: financial services and food manufacturing. The financial press reported that Opao Co had been forced to take this action because of the change in the type of its shareholders. The equity markets seem to support this action, and Opao Co’s share price has grown strongly during this period of restructuring, after growing very slowly initially.Opao Co recently sold a subsidiary company, Burgut Co, through a management buy-in (MBI), although it also had the option to dispose of Burgut Co through a management buy-out (MBO). In a statement, Opao Co’s BoD justified this by stating t hat Burgut Co would be better off being controlled by the MBI team.Opao Co is now considering acquiring Tai Co and details of the proposed acquisition are as follows:Proposed acquisition of Tai CoTai Co is an unlisted company involved in food manufactur ing. Opao Co’s BoD is of the opinion that the range of products produced by Tai Co will fit very well with its own product portfolio, leading to cross-selling opportunities, new innovations, and a larger market share. The BoD also thinks that there is a possibility for economies of scale and scope, such as shared logistic and storage facilities, giving cost saving opportunities. This, the BoD believes, will lead to significant synergy benefits and therefore it is of the opinion that Opao Co should make a bid to acquire Tai Co.Financial information related to Opao Co, Tai Co and the combined companyOpao CoOpao Co has 2,000 million shares in issue and are currently trading at $2·50 each.Tai CoTai Co has 263 million shares in issue and the current market value of its debt is $400 million. Its most recent profit before interest and tax was $132·0 million, after deducting tax allowable depreciation and non-cash expenses of $27·4 million. Tai Co makes an annual cash investment of $24·3 million in non-current assets and working capital. It is estimated that its cash flows will grow by 3% annually for the foreseeable future. Tai Co’s current cost of capital is estimated to be 11%.Combined companyIf Opao Co acquires Tai Co, it is expected that the combined compa ny’s sales revenue will be $7,351 million in the first year and its annual pre-tax profit margin on sales will be 15·4% for the foreseeable future. After the first year, sales revenue will grow by 5·02% every year for the next three years. It can be assume d that the combined company’s annual depreciation will be equivalent to the investment required to maintain the company at current operational levels. However, in order to increase the sales revenue levels each year, the combined company will require an additional investment of $109 million in thefirst year and $0·31 for every $1 increase in sales revenue for each of the next three years.After the first four years, it is expected that the combined company’s free cash flows will grow by 2·4% annually for the foreseeable future. The combined company’s cost of capitalis estimated to be 10%. It expected that the combined company’s debt to equity level will be maintained at 40:60, in market value terms, after the acquisition has taken place.Both Opao Co and Tai Co pay corporation tax on profits at an annual rate of 20% and it is expected that this rate will not change if Opao Co acquires Tai Co. It can be assumed that corporation tax is payable in the same year as the profits it is charged on.Possible acquisition price offersOpao Co’s BoD is proposing that Tai Co’s acquisition be made through one of the following payment methods:(i) A cash payment offer of $4·40 for each Tai Co share, or(ii) Through a share-for-share exchange, where a number of Tai Co shares are exchanged for a number of Opao Co shares, such that 55·5% of the additional value created from the acquisition is allocated to Tai Co’s shareholders and the remaining 44·5% of theadditional value is allocated to Opao Co’s shareholders, or(iii) Thro ugh a mixed offer of a cash payment of $2·09 per share and one Opao Co share for each Tai Co share. It is estimated that Opao Co’s share price will become $2·60 per share when such a mixed offer is made.Similar acquisitions in the food manufacturing industry have normally attracted a share price premium of between 15% and 40% previously.。

P4样题解析

P4样题解析本文由高顿ACCA整理发布，转载请注明出处提问内容：“在计算FCFF时，为什么没有考虑tax-allowable depreciation? 题目中tax-allowable depreciation is equivalent to the amount of reinvestment needed to maintain current operational levels 如何理解？对计算FCFF有何影响？”解答：“这个地方是假设可供抵税的折旧等于投资的数额以用来维持现有业务水平。

这是一个迷惑您的项目，在列表求PV的时候，考虑的都是有现金流动的项目，这一点跟cash flow很相似，但是折旧没有先进的流动和流出，故不考虑在内。

”提问内容：“关于EVA中net operating profit after tax adjustment item reason:1. Add interest net of tax: 因为利息是来自于融资项目，不属于经营项目，在利润表中扣减，因此要加回。

2. Add Development costs,请问加回原因？题目不是说他不符合资本化的条件吗？3. Less amortization of prior year development, 题目不是说，以前年度，10million 开发费用已经在账上消掉了，为什么今年还要摊销？4. EVA 项目调整的原则是什么？”解答：“1. 可以这么理解；2. 是的，发展成本是不能资本化，但是既然在发展就会有给未来带来收益的可能性，所以要加上；3. 这跟development cost原理是一样，因为得它的资金流出可以与未来的资金流入相抵，因为书中有这么一句话“sale of this product began during the current financial year, and are expected to continue for another three financial years”证明未来可能有资金的流入4. 主要是看能不能给未来带来收益或者带来收益的可能。

12月ACCA考试F4习题及答案

12月ACCA考试F4习题及答案2016年12月ACCA考试F4精选习题及答案第一部分语法及词汇练习1. John regretted __ to the meeting last week.A not goingB not to goC not having been goingD not to be going2. We regret to inform you that the materials you ordered are __.A out of workB out of stockC out of reachD out of practice3. They __ in spite of the extremely difficult conditions.A carried outB carried offC carried onD carried forward4. Mrs. Brown is supposed __ for Italy last week.A to have leftB to be leavingC to leaveD to have been left5. He’s watching TV? He’s __ to be cleaning his room.A knownB consideredC regardedD supposed6. My camera can be __ to take pictures in cloudy or sunny conditions.A treatedB adjustedC adoptedD remedied7. A new technique __, the yields as a whole increased by 20 percent.A working outB having worked outC having been worked outD to have been worded out8. Between 1974 and 1997, the number of overseas visitors expanded __ 27%.A byB forC toD in9. Children who are over-protected by their parents may become __.A hurtB damagedC spoiledD harmed10. When Mr. Jones gets old, he will __ over his business tohis son.A takeB handC thinkD get11. We had a party last month, and it was a lot of fun, so let’s have __ one this month.A anotherB moreC the otherD other12. No agreement was reached in the discussion as neither side would give way to __.A the otherB any otherC anotherD other13. It was difficult to guess what her __ to the news would be.A impressionB reactionC commentD opinion14. I decided to go to the library as soon as I __.A finish what I didB finished what I didC would finish what I was doingD finished what I was doing15. We are interested in the weather because it __ us so directly what we wear, what we do, and even how we feel.A benefitsB affectsC guidesD effects16. Will all those __ the proposal raise their hands?A in relation toB in contrast toC in excess ofD in favor of17. Children are very curious __.A at heartB in personC on purposeD by nature18. The match was cancelled because most of the members __ a match without a standard court.A objected to havingB were objected to haveC objected to haveD were objected to having19. The man in the corner confessed to __ a lie to the manager of the company.A have toldB having toldC being toldD be told第二部分定语从句长难句成分分析及翻译练习5. Television, it is often said, keeps one informed about current events, allow one to follow the latest developments inscience and politics, and offers an endless series of programs which are both instructive and entertaining.人们常说, 通过电视可以了解时事, 掌握科学和政治的最新动态。

ACCA P4考试通关秘笈之考试技巧+考题解析

ACCA P4考试通关秘笈之考试技巧+考题解析12月的考试越来越近了，楷博君感受到一股强大的复习气流迎面而来......这两天深深的觉得紧张的不只是楷博学子们，还有这些可爱可敬的老师们。

eg：周六楷博君与P4科目带头人古丽老师讨论干货推文内容长短的相关问题时，她说了这样一句话，让我觉得特别的温暖——“为什么看【P4：外汇远期合同，期货和期权(上)】的同学比下篇的多?其实，第二篇才是考试的重点。

我也不想分成两篇，但一篇推文实在装不下我对她们的爱”。

For September 2017 sitting, the global pass rate of P4 is about 35% which is reas onably acceptable. The main reasons given by the examiner for the poor perform ance can be summarized as:考试技巧Poor time management(超时，超时，超时！)Not completing sufficient questions（空题，大忌！）Poor exam technique（在擅长的题目上浓墨重彩，造成时间不足去完成剩下的题目！） Lack of question practice under examination conditions（模考练习不够！）Spending time on unnecessary introductions or definitions or reproducing fig ures already given in the question（想靠机械记忆在P段拿分！）Illegible scripts，incomplete sentences （字迹太乱，非完整句！）Numerical answers that were poorly structured (计算部分不用标准格式，不给出计算的过程！)Written answers that were poorly structured. It was difficult to identify in som e answers whether candidates were discussing advantages or disadvantages, ass umptions or risks;（论述部分逻辑性差,请用subheadings！）Not carefully reading the requirements of a question and therefore not answe ring the question that was asked (答非所问！)所以，综上所述为了顺利通过12月考试，你需要：Do not waste too much time on one question and have no enough time to cope with the remaining parts! Please do use the tips for time saving we’ve talked about during the tuition. Any figures you cannot estimate, just make u p it and move on!Use good structure or Performa to gain the four professional marks! You might b e asked to write a report or a memo or a discussion paper. They actually have th e same format: you should start with calculations(estimations) and please then u se a fresh paper to write your report. Your examiner said:“The report format should have an introduction; display a good structure and p resentation with appropriate use of appendices, followed by a conclusion/recom mendation that is relevant and meaningful to the foregoing discussion. Many ca ndidates could have easily earned a professional mark available by providing an appropriate conclusion to the report. Candidates who demonstrated an awarene ss of the business environment that is relevant to the case study scenario often s core good marks.”If you are unable to answer certain small parts of a question, that is fine. Do not panic! Just do not leave an entire question unattempt!If you find a question is relatively long and involves many discursive parts, then, please pay attention to the information given in the scenario which could actuall y be part of your answer!回顾9月考题·展望12月>>ferent areas.September 2017 Q1:(a)discuss differences between free trade areas and customs unions, and WTO;(b) evaluate based on a net present value analysis within an international investm ent appraisal context, and the implications when macroeconomic and trading en vironment change;(C) discuss about the composition of senior management strat egy such that the board skills and experience can be utilised in an efficient, effect ive and transparent wayTherefore, for Dec sitting, the question one will also combine different examin able areas from entire syllabus. Actually, it can be anything (why not? If you are well prepared). Just say in report part, if it is about foreign investment appraisal, i t will be quite similar to the Q7,Q8,Q9 in exam kit. Do not forget to assess the res ults you’ve achieved. If the examiner asks you to discuss the assumptions used, please do not just list the assumptions. You must discuss whether or not they are reasona ble.If it is about acquisition, refinancing or reorganization, it will be quite similar t o Dec 2015 Q1, June 2016 Q2, Q3. Different business valuation methods (FCF, FC FE, P/E,DVM,BSOP) will be tested in the computational part. Their individual pros and cons will be discussed in the report. Do not forget reverse takeover indeed is not an acquisition but a quick listing strategy. (Please review recent technique ar ticle). Also, the three aspects from pattern of behavior can be applied in this section to analyze why many acquisitions in reality failed. The maximum premium or net extra benefit generated from an acquisition or extra finance required are the topics been tested many times. Different acquisition financing strategies (cash of fer, share-share, bonds, and convertibles) and the impacts on the share price(s) o f acquiring company or (target company) or P/E ratios.Risk adjusted WACC is very important! It can be incorporated into investment appraisal or business valuation questions. Do not forget how to de-gear proxy’equity beta, and re-gear relevant asset beta.BSOP can also be used to value equity. The relevant calculation has been teste d by the old examiner but not the current examiner. It is crucial to list the five var iables and be able to discuss the limitations. Delta hedge and five Greeks can als o come. Please be prepared to calculate hedge ratio. If you are holding shares, y ou will not necessarily to sell call options but to buy the puts.Also, other topics like: bond valuation, duration or modified duration of bond, Islamic finance, probability analysis, regulation of takeover, and different risks of setting up foreign division can also appear in section A or B.Section B:the topics mentioned above can also be tested as a 25-marks question. Hedging question can either be against foreign currency risk (please read the other two ar ticles) or interest rate risk:Interest rate hedging:Different hedging strategies: forward, future, option on future, collar, swap, cur rency swap (indeed is an interest rate swap, just the counter part is in a different country).This question will not be as difficult as you expect. Please review recent questi ons (Dec 2015Q2, 2013 Dec Q2).You should write down the details, such as: the number of contracts, the expir y date of futures, the future price or exercise price of option.The function of interest rate future is to fix the LIBOR (for instance) at the dat e of closing the transaction ( the start of loan or deposit). The future price a t close-out date should be estimated through estimating unexpired basis at clos e-out date which is an important working. That is also where the basis risk comin g from.Option on futures gives buyer right but not obligation to exercise future contr acts. Using option is normally an expensive alternative, as premium must be paid regardless of the fact option will be exercised or not. The profit on option for option buyer is calculated by comparing the future price at close-out date and the exercise price selected. Please ensure you will get this right in the exam.The purpose of using collar is to lower premium payable and to limit the upsi de benefit (as the possibility of this is low). If the company will borrow money, it will buy puts (cap) to set an upper limit of borrowing rate and sell calls (floor) to set a lower limit of borrowing rate. If the company will deposit money, it will buy calls (floor) to set a lower limit of depositing rate and to sell puts (cap) to set an upper limit of depositing rate. When it buys options, it will pay the premium. Wh en it sells options, it will receive the premium.Determining forward rates and its application to interest swap.2 Section B(September 2017)Q2(a) a discuss the merits of specific sources of finance for an acquisition proposal and to recommend the most appropriate mode of financing(b) discuss the regulatory and ethical issues when raising financing capitalQ3(a) calculate how much an unbundled part of a company may be sold for and th e impact of its sale on the company’s financial structure and performance (b) an evaluation of the decision to sell off the unbundled part of the company Q4(a) hedge against interest rate risk(b) discuss the role of the treasury function in different geographical locations, in managing risk exposure and maximising corporate valueP4 exam is extremely time demanding, please manage your time wisely and plea se write the complete sentences in the exam!。

2015年6月ACCA F4考试真题答案

AnswersFundamentals Level –Skills Module, Paper F4 (CHN)Corporate and Business Law (China)June 2015 Answers Section B1(a)The real estate contract was a valid one even if the Bank disagrees with the transaction between Mr Dong and Ms Lee.According to the Property Law, if a contract to create, modify, assign and terminate rights in immovables, it shall take effect upon conclusion of the contract; the fact that no registration has been made shall not affect the validity of such contract.(b)The relevant government authority could lawfully refuse to register the real estate contract, even though Ms Lee promised torepay the outstanding amount of the loan. According to the Property Law, if a mortgagor transfers the mortgaged property during the mortgage term, it shall receive the consent of the mortgagee or the transferee pays off the debts. Since the Bank refused to give consent and Ms Lee merely promised to pay off the debts, the conditions to transfer a mortgaged property were not satisfied.(c)Since Ms Lee repaid the outstanding amount of the loan and extinguished the mortgage, the government authority shouldregister the contract, as the conditions to transfer the mortgaged property have been satisfied.2(a)The legal nature of the fax sent by Food Shop was an invitation to offer, not an effective offer, since this fax contained only the name and quantity of the goods, lacking the essential and necessary factor for an effective offer, i.e. the price of the goods.Hence, it was only an invitation to offer.(b)The legal nature of taking delivery of the goods by Food Shop was an acceptance. Since the delivery of the goods by SanyiFarm indicated its expression to enter into a contract with Food Shop in the way of action, it constituted an offer. According to the Contract Law, an offeree may take various ways to accept the offer, such as written form, oral form or action. In this case Food Shop took delivery of the goods; it was an acceptance in the form of action.(c)There was a contract between Sanyi Farm and Food Shop. According to relevant provisions of the Contract Law, the formationof a contract takes place by way of offer and acceptance. Where an acceptance made by the offeree reaches the offeror, a contract is formed. In this case Sanyi Farm delivered the goods, which was an offer. Food Shop, as an offeree, took over the goods and resold the goods. This meant Food Shop accepted the offer by Sanyi Farm. Therefore, a contract was formed.3(a)According to the Company Law, when a shareholder intends to transfer their shares, under equal conditions the other shareholders shall have priority to purchase. Where two or more shareholders fail to reach an agreement as to the respective proportion of purchase, they shall exercise the priority in proportion to their respective shares. Hence, Zhao and Sun would share the shares from Qian 50% each.(b)According to Article 75 of the Company Law, any shareholder of a limited liability company may require the company topurchase their shares with a reasonable price if they meet any one of the circumstances as set. Since Lee’s request did not fall within any circumstance prescribed by the Law, his request should not be upheld by the court if he brought a law suit.(c)Qian was entitled to transfer his shares. Zhao agreed with transfer; Lee failed to give a reply within 30 days upon receipt ofthe notice, which should be deemed as a consent to the transfer. Sun intended to exercise his right of priority but offered a lower price than that of the listed company. Therefore, Qian has met all the conditions to transfer his shares to the listed company.4(a)According to the Enterprise Bankruptcy Law, where a creditor is indebted with their debtor before the bankruptcy application is accepted by the court, they may claim for debts’ offset to the bankruptcy administrator. Since the rental for the year of 2014 was due and the two quarters of service fees occurred before the acceptance of the application by the court, Stine’s debt might be offset from his credit.(b)According to the law, after the court accepts a bankruptcy application, the bankruptcy administrator shall decide to terminateor continue to perform the contract and notify the decision to the other parties concerned. Mering was declared bankrupt and lost its capacity, so it would be impossible to continue the leasing contract. Therefore the request of Stine to terminate the leasing contract was in conformity with the law.(c)By way of offsetting, Stine might reduce his losses in the liquidation process. Since Mering was unable to settle its debts due,it meant that the credits of all creditors could not be repaid fully at the end of liquidation. Therefore the debts owed to Mering should be settled in full by Stine.5(a)Mr Ding’s act of accepting bribery violated the criminal law and the relevant rules of the Company Law as well. Besides the criminal charges, he should be liable for his fraudulent behaviour of damaging the interests of Daqing and its shareholders.Therefore, Ms Huang was entitled to bring a law suit against general manager Mr Ding on the ground that his acts caused her loss of interests.(b)With respect to Daqing’s damage, Ms Huang should first request the board of directors or supervisory board to take legalaction against Everbright Co. Where these two bodies refuse to take reasonable actions, Ms Huang might, in her own name but for the interests of the company, bring a shareholder representative litigation against Everbright Co. On the other hand, she might also bring a direct litigation against Everbright Co on the ground that the connected transactions caused indirect damage to the shareholder’s interests.Fundamentals Level –Skills Module, Paper F4 (CHN)Corporate and Business Law (China)June 2015 Marking Scheme Section B1(a) 1 mark for the correct conclusion and 1 mark for the reasons.(b) 1 mark for the correct conclusion and 1 mark for the reasons for the denial of the government to register the contract.(c) 1 mark for the correct conclusion and 1 mark for the reasons.2(a) 1 mark for the correct conclusion as to the legal nature of the fax sent by Food Shop, 1 mark for the reasons.(b) 1 mark for the correct conclusion, 1 mark for the reasons to explain the conclusion.(c) 1 mark for the correct conclusion as to the formation of the contract, 1 mark for the reasons that a contract was formed byway of offer and acceptance.3(a) 1 mark for the correct conclusion, 1 mark for the reasons to explain such a conclusion.(b) 1 mark for the correct conclusion, 1 mark for the reasons. The conditions for a shareholder to request the company topurchase their shares are not needed.(c) 1 mark for the correct conclusion, 1 mark for the reasons.4(a) 1 mark for the correct conclusion, 1 mark for the reasons.(b) 1 mark for the correct conclusion, 1 mark for the reasons.(c) 1 mark for the correct conclusion, 1 mark for the reasons to explain the reasons why offset should be in Stine’s interests.5(a) 1 mark for the correct conclusion, 1 mark for the reasons.(b) 2 marks for the shareholder’s representative litigation in Ms Huang’s own name but for the interests of the company and2 marks for the direct litigation in Ms Huang’s own name for her own interests.。

ACCA国际注册会计师P4真题答案整理.doc

l.Chrysos Co(a)what a reverse takeover involvesgain a listing without initial public offering (IPO)merges with a listed ’shell' companyinitially purchases equity sharesthen issues new equity sharesthereby gain a listingAdvantages relative to an IPOLcompleted much quicker2.cheaper3.potential benefits of going publicDisadvantages relative to an IPO1.hidden liabilities2,original shareholders sell their shares immediately3.cannot develop the necessary expertise and knowledge of listing rules and regulations4.not obtain a sufficient analyst coverage and investor following(b)Report to the board of directors (BoD), Chrysos CoThis report provides extracts from the financial positionIt also contains an explanation of the process usedFinally, the report discussesIt is recommended management buy-out receive $3,289m (appendix one)Extract of Chrysos Co's financial position following the restructuring programmeEstimate of Chrysos Co's equity value following the restructuring programme will be just over $46 billion(appendix three).Process undertaken in determining Chrysos Co's equity valuea growth rate of 4% on cash flows in perpetuitydiscounted at Chrysos Co's cost of capital (appendix two)profit before depreciation and taxdeducting the depreciation and taxationbank loan debt is then deducted (appendix three)Assumptions made in determining Chrysos Cot equity valueungeared cost of equityModigliani and Millcr^s proposition 2accurate estimate of the free cash flows (appendix three)changes in working capital arc reckoned to be immaterialDepreciation is assumed to be the same as the capital needed for reinvestment purposescash flows will grow in perpetuity over-oplimisticImpact of the restructuring programme on Chrysos Co and on the venture capital organisations (VCOs) venture capital organisations (VCOs)the proportion of the VCOs' equity share capital will increase to 40%the share of the equity value increase by $9,229m,which is 77-5% more than the total of the value of bonds cancelled and extra payment made (appendix four) the value of their investment has increased substantiallyfeasibility studyon the annual growth rate in cash flows of 4%and the assumption of growth in perpetuitythe extent of additional value created indicate the impact is positiveChrysos Coraise extra debt financejust under $9,600m of possible debt finance which could be accessedraise just under an extra $7,800m debt fundinghave $1,439 million in net cash available from the sale of the machinery parts manufacturing business unit・given that the company has access to an extra $7.800m debt funding to expand its investmentit is likely that the restructuring programme will be beneficialrecommended tries to determine its current equity value and comparesshareholder groups need to be satisfiedabout the potential negative impact of these situationsagainst the potential additional benefitsbefore proceeds with the programme.Conclusioncreates an opportunity for Chrysos Co to have access to extra fun dingThe VCOs are likely to ben efit financially as long as they are satisfied about the assumptionsHowever, Chrysos Co will need to ensure thatall equity holder groups are satisfied with the change in their respective equity holdings.Report compiled by:Date:AppendicesAppendix One: Unbundling the manufacturing business unitOption 1: Sale of assetsNet proceeds to Chrysos Co from net sale of assets of the manufacturing business unit arc $3,102 million. Option 2: Management buy-outProfit before depreciation, interest and taxDepreciation (12% x 20% x ($7,500m + $5,400m))Tax (18% x $530m)Cash flowsEstimated value = ($435m x 1-08)/0-10 = $4,698mAmount payable to Chrysos Co = 70% x $4,698m = $3,289moption 2 marginally betterAppendix Two: Calculation of cost of equity and cost of capitalChrysos Co, estimate of cost of equity (Ke) and cost of capital (CoC)Ke = Modigliani and Miller Proposition 2 (with tax)CoC = The weighted average cost of capitalAppendix Three: Estimate of valueProfit before depreciation and taxDepreciation (12% x ($6,000m + $5,520m)) (1,382)Tax (18% x $4,498m)Cash flowsCost of capital to be used in estimating Chrysos Co's value is 12% (appendix two) Estimated corporate value =The Growth ModelEstimated equity value = corporate value 一debtAppendix Four: Value created for VCOsValue ailributable to the VCOsValue from increased equity ownership (this has doubled from 20% to 40%)Value of unsecured bonds foregone by the VCOsAdditional capital invested by the VCOsTotal of additional capital invested and value of bonds forgoneAdditional value 77-5% (or $4.029m)(c)As a private company,Representatives from each groupsdecisions will be made after agreement from all representativesno single stakeholder group holds primacy over any other groupOnce listedhave a large and diverse range of equity shareholderspressure to engage in value creating activitythe equity shareholders, needs will hold primacy over the other stakeholder groups the power of the supervisory board will diminish as a rcsul3 Buryccs Co(a)currency swaptaking out a loan in €making an arrangement with a counterparty in Wirtoniawhich lakes out a loan in $pay the interest on the counterparty \ loanand vice versaAdvantagesmatch the income, reducing foreign exchange riskreverse the swap by exchanging with the other counterpartyOther methods of hedging risk may be less certaincheaper than other methods of hedgingchange debt profile, diversify risk and lake advantage of probable lower future interest ratesDrawbackscounterparty may default, pay interest in its currency, reduced by obtaining a bank guaranteenot worthwhile if the exchange rate is unpredictableexchange rates largely determined by inflation ralespredicted inflation rate in Wirtonia is not stableInflation is increasing in Wirtoniainterest rates will increase as a result,increasing Buryecs Co's finance costs.docs not hedge the whole amountAnother method hedge the additional receipt in Year 3 and the receipts in the intervening yearsexchange controls, no receipt at the end of Year 3(b)(i)Gain on swapBank feeGain on swap after bank feeThe swap arrangement will work as follows:AdvantageNet resultAfter paying the 30 point basis fee, Buiyccs Co will effectively pay interest at the bank rate 一0-3% and benefit by90 basis points or 0-9%・The counterparty will effectively pay interest at 5-2% and benefit by 60 basis points or 0-6%・(ii)Using the purchasing power parity formula to calculate exchange rates:Si 二Sox (1 + hc)/(1 +hb)At Year 3, $5.000 million will be exchanged at the original spot rate as per the agreement and the remaining inflows will be exchanged at the Year 3 rale・Swap translated at 0-1430Amount not covered by swap translated at 0-1315Cash flows in home countryDiscount factorPrcscnt valueThe net present value of the project is €185 nmillion、indicating that it should go ahead・However, the value is dependent on the exchange rate, which is worsening for the foreign income・also uncertainties about the variability of returns during the three yearsin excess of their risk appetite and dccli ne the opport unity(C)Receipt using swap arrangement = €715m + €329m = € 1,044mReceipt if transaction unhedged = $7,500m x ()• 1315 = €986mPredicted exchange rate at year 3 is €01315 = SI or S7-6046 = €1OptionsBuy $ put options as receiving $$7・75 exercise priceDo not exerciseNet receipt = €986m - (1 • 6% x $7,500m x 0-1430) = €969rn$7*25 exercise priceExerciseReceipt from government = $7,500m/7・25 = € 1,034mNet receipt = € 1,034m - (2-7% x $7,500m x 0-1430) = €1,005mThe $7-25 option gives a better result than not hedging, given the current expectations of the exchange rate. However, it gives a worse result than the swap even before the premium is deducted, because of the exchange rate being fixed on the swap back of the original amount paid.These calculations do not take into account possible variability of the finance costs associated with the swap, caused by swapping into floating rate borrowing.1 Morada Co(a)how business risk and financial risk are relatedengage in some risky activities to generate returns in excess of the risk free rate of returnexposed to differing amounts of business and financial riskBusiness riskdepends on the decisions a business makes with respect to the services and products it offers consists of the variability in its profitsFinancial riskrelates to the volatility of earnings due to the financial structure of the businessthe shareholders or owners may not want to bear risk beyond an acceptable levelrisk management strategyrisk identification, assessingmeasuring through predicting, analysing and quantifying itwhich risks to assume, avoid, retain and transfernot aim to avoid all riskscontrollability, frequency and severity of the riskeliminate or reduce some risks through risk transferRisk mitigation is the process of transferring risksRisk diversification is a process of risk reduction(b)Report to the board of directors (BoD), Morada CoThis report provides a discussion onThe main assumptions made in drawing up the estimates will also be explained・The report concludes by recommendingDiscussionThe table belowthe cost of equity and the cost of capital (appendix 1)the forecast earnings after tax for the corning year (appendix 2)comparison purposes, figures before any changestax shield is reduced significantly due to the lower amount of debt borrowinghigher business riskmore than override the lower cost of debtthe benefit of the tax shield is also almost eroded by the increase in the cost of debt as a percentage of non-current assetsUnder the first director's proposalUndcr the second director's proposalAssumptions1 ・ weighted average of the asset betas2.share price not changing3.the current assets will change due to changes in the profit after tax figureRecommendationIt is recommended thatThe second results ina lower return on investmentand a virtually unchanged cost of capitalfirstincrease the return on investmentbut higher cost of capitalreduce risk, not achievedcaveatassumptions made not reasonable, reduce the usefulness of the analysisReport compiled by:Date:。

ACCA考试P4历年真题精选及详细解析1109-76

ACCA考试P4历年真题精选及详细解析1109-76Question：ST Inc makes a bid to acquire all the share capital of WV Inc, paying for the acquisition by means of a share exchange. The shares of ST Inc are currently trading on a P/E of 12.5 and the shares of WV Inc are trading on a P/E ratio of 15. No savings or increase in combined sales are expected as a result of the takeover.Given no change in the annual profits after tax of either company, what will happen to the earnings per share of the combined ST group after the takeover?A. EPS will remain the same.B. EPS will go down.C. It is impossible to assess, without figures for earnings and numbers of shares.D. EPS will go up.The correct answer is: EPS will go down.When the bid consideration is all in shares and one company buys another on a higher P/E ratio, the EPS will fall after the takeover unless total profits can be increased after the takeover, perhaps through economies of scale or higher combined total sales. In this question, there are no such profit increases.。

2015年6月ACCA P4考试真题答案

Answers
Professional Level – Options Module, Paper P4 Advanced Financial Management
June 2015 Answers
1 (a) Benefits of own investment as opposed to licensing Imoni Co may be able to benefit from setting up its own plant as opposed to licensing in a number of ways. Yilandwe wants to attract foreign investment and is willing to offer a number of financial concessions to foreign investors which may not be available to local companies. The company may be able to control the quality of the components more easily, and offer better and targeted training facilities if it has direct control of the labour resources. The company may also be able to maintain the confidentiality of its products, whereas assigning the assembly rights to another company may allow that company to imitate the products more easily. Investing internationally may provide opportunities for risk diversification, especially if Imoni Co’s shareholders are not well-diversified internationally themselves. Finally, direct investment may provide Imoni Co with new opportunities in the future, such as follow-on options.

2011年ACCAP4-P7真题答案

2011年ACCA P4-P7真题答案Professional Level – Skills Module, Paper P4 Advanced Financial Management December 2011 Answers 1.Up to 4 professional marks are available for the presentation of the answer, which should be in a report style.(i) Initial EvaluationThe information provided has been used to assess whether the production of the X-IT should be moved to Gamala from the USA. Initially a base case net present value calculation is conducted to assess the impact of the production in Gamala. This is then adjusted to show the impact of cash flows in the USA as a result of the move, the immediate impact of ceasing production and the impact of the subsidy and the tax shield benefits from the loan borrowing.The calculations presented in the appendix show that the move will result in a positive adjusted present value of just over $2·4 million. On this basis, the production of X-IT should cease in the USA and the production moved to Gamala instead.AssumptionsIt is assumed that the borrowing rate of 5% is used to calculate the benefits from the tax shield. It could be argued that the risk free rate of 3% could be used as the discount rate instead of 5% to calculate the present value of benefits from the tax shields and the subsidies.In adjusted present value calculations, the tax shield benefit is normally related to the debt capacity of the investment, not the actual amount of debt finance used. Since this is not given, it is assumed that the increase in debt capacity is equal to the debt finance used.It has been assumed that many of the input variables, such as for example the tax and capital allowances rates, the various costs and prices, units produced and sold, the rate of inflation and the prediction of future exchange rates based on the purchasing power parity, are accurate and will change as stated over the four-year period of the project. In reality any of these estimates could be subject to change to a greater or lesser degree and it would be appropriate for Tramont Co to conduct uncertainty assessments like sensitivity analysis to assess the impact of the changes to the initial predictions.(Note: credit will be given for alternative relevant assumptions)(ii) Government ChangeFrom the preamble it would seem that a change of government could have a significant impact on whether or not the project is beneficial to Tramont Co. The threat to raise taxes may not be too significant as the tax rates would need to increase to more than 30% before Tramont Co would losemoney. However, the threat by the opposition party to review ‘commercial benefits’ may be more significant.Just over 40% of the present value comes from the tax shield and subsidy benefits. If these were reneged then Tramont Co would lose a significant amount of the value attached to the project. Also the new government may not allow remittances every year, as is assumed in part (i). However, this may not be significant since the largest present value amount comes from the final year of operation.Other Business FactorsTramont Co should consider the possibility of becoming established in Gamala, and this may lead to follow-on projects. The real options linked to this should be included in the analysis. Tramont Co’s overall corporate strategy should be considered. Does the project fit within this strategy? Even if the decision is made to close the operation in the USA, there may be other alternatives and these need to be assessed.The amount of experience Tramont Co has in international ventures needs to be considered. For example, will it be able to match its systems to the Gamalan culture? It will need to develop strategies to deal with cultural differences. This may include additional costs such as training which may not have been taken into account.Tramont Co needs to consider if the project can be delayed at all. From part (i), it can be seen that a large proportion of the opportunity cost relates to lost contribution in years 1 and 2.A delay in the commencement of the project may increase the overall value of the project. Tramont Co needs to consider the impact on its reputation due to possible redundancies. Since the production of the X-IT is probably going to be stopped in any case, Tramont Co needs to communicate its strategy to the employees and possibly other stakeholders clearly so as to retain its reputation. This may make the need to consider alternatives even more important.(Note: credit will be given for alternative relevant comments) Appendix Gamalan Project Operating Cash FlowsProfessional Level – Options Module, Paper P5 Advanced Performance Management December 2011 Answers2.Mackerel has to make a decision on which level of design expenditure and so on which type of APV to tender. This choice will be dictated by the objectives of the business and its appetite for risk.(i) Risks and risk appetite for APV contractIt is natural to assume that the main objective of a business is the maximisation of shareholder wealth and in the context of the APV project the main measure of performance will be the profitmade on the contract, as this will drive the earnings over which the institutions are concerned. However, in a decision where there is risk and uncertainty, the company also has to decide on its appetite for risk. Risk appetite is usually divided into three categories:risk averse individuals tend to assume the worst outcome and seek to minimise its effectrisk seekers are interested in the best outcomes and seek to maximise their returns under these circumstancesrisk neutral individuals are interested in the most probable outcomeThe risks for Mackerel arise from uncertainties in its external environment. The key stakeholders in this situation are the government (the customer) and Mackerel’s shareholders. The other factor giving rise to uncertainty is the forecast price of steel, the main raw material in the APV’s construction.The shareholders have indicated a concern over earnings volatility and so seem to be risk averse. This is commercially sensible in a recessionary situation where the company’s survival could be placed at risk if a large project (such as the APV) were to fail. The project can be seen to be large for Mackerel as the expected profit is $5m if package 1 is chosen and this is material when compared to the current operating profit of $20·4m.A risk averse approach might also be called for where winning the bid could lead to additional future work so that securing a deal is more important than optimising profit. This appears to be the case here as the government is the major customer of Mackerel.The demand level for the APV is also uncertain and, given that there are significant fixed costs of design and development, these different levels have a material impact on the return from the project. There appear to be problems in quantifying the level of risk that will affect the choice of method of analysing the return from the contract. Mackerel should evaluate the contract using different methods and come to a conclusion based on the most appropriate one for its objectives and risk appetite.A further source of risk is the danger of cost over runs. If successful in its tender, Mackerel will be working towards a fixed price for the contract ($7·5 m + budgeted variable cost per unit plus 19%). Any over runs of actual cost as compared to budget will reduce the profit margin earned.A major cost risk is the cost of the primary raw material of production (steel). However, this has been fixed by the forward purchase of the steel for the contract. This has eliminated the risk of price fluctuations during the contract.(ii) Risk evaluation methods and resultsAs was stated earlier, it is natural to assume that the main objective of the business is the maximisation of shareholder wealth and, in the context of the APV project, the main measure ofperformance will be the profit made on the contract. Although discounted cashflow would be a superior approach, there is insufficient data available here to calculate it.The first priority is to ensure that the contract complies with the government requirement of a maximum per unit cost of $70,000 to Mackerel. The results per Appendix 2 are:Cost per unitDemand 500 750 1,000 Package1 62,972 57,972 55,472 2 65,472 59,638 56,7223 67,972 61,305 57,972This complies with the contract specifications.The total profit for each design package under the different demand levels is calculated at Appendix 2 as:Profit ($)Demand 500 750 1,000 Package1 4,557,302 6,835,953 9,114,604 2 3,307,302 5,585,953 7,864,604 3 2,057,302 4,335,953 6,614,604 There are four possible approaches to selecting a package. The methods depend on the information available and the risk appetite of the decision-maker.If we assume that there is insufficient information to make an estimate of the probabilities of the different demand levels then we are making a decision under uncertainty and there are three common methods of approach which depend on the risk appetite of the decision-maker (maximax, maximin and minimax regret). I have calculated payoff and regret tables in Appendix 1. The results can be summarised as follows:Risk seekers and the risk averse will use profit under the different demand scenarios to make the appropriate choice.Risk seekers will aim to maximise the possible returns from the different demand scenarios. The maximax method would be appropriate in this situation and here the company would be advised to choose design package 1 which will have a maximax profit of $9·1m.Risk averse decision-makers will aim to maximise the minimum possible returns from the different demand scenarios. The maximin method would be appropriate in this situation and here the company would be advised to choose design package 1 which will have a maximin profit of $4·6m. Pessimistic decision-makers will choose to focus on the lost profit (regret) compared to the best choice under that demand scenario. They aim to minimise the maximum level of regret that they can suffer under any demand scenario. This minimax regret method shows the company would be advised to choose design package 1 which will lead to no regret.These conclusions should not be surprising as design package 1 has considerably lower fixed costs and yet is scalable to cope with all levels of demand.A risk neutral manager does not take an optimistic or pessimistic stance. They will choose the option that yields the maximum expected value. This method depends on the use of probabilities for each of the outcomes. The risk manager has attempted to quantify the probabilities of the different levels of demand given the different design packages employed. It would be wise to involve both the design and sales teams in these estimates as such estimates are usually highly subjective and a broad canvassing of opinion may help to gain more accurate values.The estimated probabilities allow the calculation of an expected profit for each choice of design package. Appendix 2 shows that the maximum expected profit of $5·6m arises if design 2 is chosen. This is due to the much greater likelihood of higher demand in that case. Design 3 does not seem to increase the chances of higher demand sufficiently to outweigh the extra fixed cost of $1·25m compared to design 2. (iii) RecommendationIn this situation, the choice of method will depend on the risk appetite of Mackerel, whether this type of decision is likely to be repeated many times and the accuracy of the probability estimates. As Mackerel shareholders seem risk averse, the profit under the contract is significant compared to the operating profit of the whole company and the economic environment is difficult so the low risk method of maximin seems appropriate. The use of expected values appears questionable as the probability estimates have not been widely debated and, in the current economic circumstances, the company’s survival may be at risk and so the repeated trials necessary to make this method valid may not arise.Design package 1 should be chosen as with unknown probabilities, it carries the least risk. The company could seek to sharpen the probability estimates and review the implications for company survival before considering the use of expected values, although there is the potential to make an additional expected profit of $573k if we could justify choosing design 2 over design 1. The risk over steel prices has been removed by using forward (advance) contracts to cover the purchase of the material required. As steel is used in many of the company’s products, this should be investigated as a general risk management technique for the company.Professional Level – Options Module, Paper P7 (INT) Advanced Audit and Assurance (International) December 2010 Answers3(a) Brieﬁng notes Subject: Business risks facing Jolie Co Introduction These brieﬁng notes evaluate the business risks facing our ﬁrm’s new audit client, Jolie Co, which operates in the retail industry, and has a year ended 30 November 2010.Ability to produce fashion itemsThe company is reliant on staff with the skill to produce high fashion clothes ranges, and also with the ability to respond quickly to changes in fashion. If Jolie Co fails to attract and retain skilled designers then the clothing ranges may not be desirable enough to attract customers in the competitive retail market. The high staff turnover in the design team indicates that Jolie Co struggles to maintain consistency in the design team. This could result in deterioration of the brand name and, ultimately, reduced sales.There would be a high cost associated with frequently recruiting – this would have an impact on operating margins.Inventory obsolescence and marginsThere is a high operational risk that product lines will go out of fashion quickly, because new ranges are introduced so quickly to the stores (every eight weeks), leading to potentially large volumes of obsolete inventory. These product lines may be marked down to sell at a reduced margin. The draft results show that operating margins have already reduced from 17·9% in 2009 to 16·8%in 2010. Any signiﬁant mark down of product lines will cause further reductions in margins. Wide geographical spread of business operationsJolie Co operates a large number of stores, many distribution centres, and has an outsourced function which is located overseas. This type of business model could be hard to control, increasing the likelihood of inefﬁiencies, systems deﬁiencies, and theft of inventories or cash.E-commerce – volume of salesOn-line sales now account for $255 million ($250 per order x 1,020,000 orders). In the previous year, on-line sales accounted for $158 million ($300 per order x 526,667 orders). This represents an increase of 61·4% (255 – 158/158 x 100%). One of the risks associated with the on-line sales is the scale of the increase in the volume of transactions, especially when combined with a new system introduced recently. There is a risk that the system will be unable to cope with the volume of transactions, leading possibly to unﬁled orders and dissatisﬁd customers. This would harm the reputation of the company and the JLC brand.The company has recently upgraded its computer system to integrate sales into the general ledger.A disaster plan should have been put into place, for use in the event of a system shutdown or failure. The risk is that no plan is in place and the business could lose a substantial amount of revenue in the event of the system failure.E-commerce – security of systemsIt is crucial that the on-line sales system is secure as customers are providing their credit card details to the site. Any breach of security could result in credit card details being stolen, and Jolie Co may be liable for losses suffered by customers if their credit card details were used fraudulently. There would clearly be severe reputational issues in this case. Additionally, the system must be secure from virus inﬁtration, which could cause system failure, interrupted sales, and loss of customer goodwill.E-commerce – tax and regulatory issuesThere are several compliance risks, which arise due to on-line sales. Overseas sales expose Jolie Co to potential sales tax complications, such as extra tax to be paid on the export of goods to abroad, and additional documentation on overseas sales that may be needed to comply with regulations. Another important regulatory issue is that of data protection. Jolie Co faces the risk of non-compliance with any data protection regulation relevant to customers providing personal details to the on-line sales system.Jolie Co is now making sales overseas. If these sales are made in a different currency to Jolie Co’s currency, the business will be exposed to exchange rate ﬂctuations which will have an impact on the company’s proﬁ margin.Tutorial note: Credit will be awarded for other e-commerce related risks, such as the risk of obsolescence (leading to the need to continually update the website and system), and associated costs; and the risk of not having enough staff skilled in IT and e-commerce issues. Outsourcing of phone ordering systemThe fact that Jolie Co engaged the outsource provider offering the least cost could lead to business risks. Staff at the call centre may not be properly motivated, due to low wages being paid, and may fail to provide a quality service to Jolie Co’s customers, leading to loss of customer goodwill. As the call centre is overseas, the staff may have a different ﬁst language to Jolie Co’s customers, leading to customer frustration if they are not understood, and incorrect orders possibly being made. In addition, there may be staff shortages due to the low wage offered, leading to delay in answering calls and lost sales.Overseas call centres are not always popular with customers, so Jolie Co may ﬁd that fewer customers use this method of purchase. However, the on-line system is there as an alternative for customers, and is proving popular, so this may not be a signiﬁant risk for the company.The fact that Jolie Co opted for the lowest cost provider for the phone ordering system could pose a potential problem in that the provider may not be sustainable in the long term. If the provider fails to generate sufﬁient proﬁ or cash, it may shut down, leaving Jolie Co without a crucial part of the sales generating system.Ethical Trading InitiativeJolie Co has aligned itself to an initiative supporting social and environmental well-being, presumably to promote its corporate social responsibility. The risk associated with this is that the claims that products have been produced in a responsible way can easily be undermined if the supply chain is not closely managed and monitored. Such claims are often closely scrutinised by the public and pressure groups, and any indication that Jolie Co’s products have not been sourced responsibly will lead to loss of customer goodwill and waste of expenditure on the advertising campaign.Distribution centresThere is a risk of non-compliance with the operating licence issued by the local government authority. The authority will monitor the operating hours of the distribution centres, and also the noise levels created by them. Breaches of the terms of the licence could lead to further revocations of licences, causing huge operational problems for Jolie Co if the centres are forced to close for any period of time. Fines and penalties may also be imposed due to the breach of the licence. Financial performanceTotal revenue has decreased by $80 million, or 5·2% (80/1,535 x 100). Operating proﬁ has alsofallen, by $30 million, or 10·9% (30/275 x 100). The information also shows that the average spend per order has fallen from $300 to $250. These facts may signify cause for concern, but operating expenses for 2010 are likely to include one-off items, such as the costs of the new on-line sales system, and the advertising of the ‘fair-trade’ initiative. The fall in spend per customer could be a symptom of general economic difﬁulties. The company has increased the volume of on-line transactions signiﬁantly; so on balance the overall reduction in proﬁ and margins is unlikely to be a signiﬁant risk at this year-end, though if the trend were to continue it may become a more pressing issue.Jolie Co’s ﬁance costs have increased by $3 million, contributing to a fall in proﬁ before tax of 13%. The company has sufﬁient interest cover to mean that this is not an immediate concern, but the company should ensure that ﬁance costs do not escalate.ConclusionJolie Co faces a number of operational and compliance risks, the most signiﬁant of which relate to the need for constant updating of the product lines and the potential for obsolete inventory. The new on-line sales system also raises risks in terms of security, systems reliability and the sheer volume of transactions. Jolie Co must also carefully manage the risk of non-compliance with local government authority regulations. The trend in ﬁancial performance should be carefully monitored, as further reductions in revenue and margins could indicate that a change in business strategy is needed.(b) Financial statement risksValuation of inventoryHigh fashion product lines are likely to become out-of-date and obsolete very quickly. Jolie Co aims to have new lines in store every eight weeks, so product lines have only a short shelf life. Per IAS 2 Inventories, inventory should be valued at the lower of cost and net realisable value, and could be easily overvalued at the year-end if there is not close monitoring of sales trends, and necessary mark downs to reﬂct any slow movement of product lines. The decline in revenue could indicate that the JLC brand is becoming less fashionable, leading to a higher risk of obsolete product lines.Orders made over the phone or by the internet are prone to higher levels of returns than items purchased in a store, as the customer may ﬁd that the item is not the correct size, or they do not like the item when it arrives. The risk is insufﬁient provision has been made in the ﬁancial statements for pre year-end sales being returned post year-end.Completeness/existence of inventoryJolie Co has 210 stores and numerous distribution centres. It may be hard to ensure that inventorycounting is accurate in this situation. There may be large quantities of inventory in-transit at the year-end, which may be missed from counting procedures, meaning that the inventory quantities are incomplete. Equally, it may be difﬁult for the auditor to verify the existence of inventory if it cannot be physically veriﬁd due to being in-transit at the year-end. Inventory could be the subject of fraudulent ﬁancial reporting, as it would be relatively easy for management to ‘inﬂte’ quantities of inventory to increase the amount recognised on the statement of ﬁancial position. The clothing items could also be at risk of theft, making inventory records inaccurate. Unrecorded revenueThe on-line and phone sales systems could contribute to a risk of misstated revenue ﬁures. Firstly, the on-line sales system is integrated with the general ledger, so sales made through the system should automatically be recorded in the accounting system. However, the system is new, and it is possible that the integration is not functioning as expected. The scenario does not state whether the phone sales system is integrated, but it is unlikely given that the function is outsourced, so a similar risk of unrecorded transactions may arise here.Sales made in store will include a proportion of cash sales. The risk is that the cash could be misappropriated, and the revenue unrecorded.Over-capitalisation of IT/website costsThe on-line sales system has been upgraded at signiﬁant cost. There is a risk that costs have been incorrectly capitalised. SIC 32 Intangible Assets – Website Costs states that only costs relating to the development phase of the project should be capitalised, but costs of planning, and all costs when the website is operational should be expensed. Software development costs follow similar accounting principles. Hence there is a risk of overvalued assets and unrecognised expenses. Overvaluation of the brand nameThe JLC brand name is recognised as an intangible asset, which is the correct accounting treatment for a purchased brand. The risk is that the asset is overvalued, for two reasons. Firstly, if no amortisation is being charged on the asset, management are assuming that there is no end to the period in which the brand will generate an economic beneﬁ. This may be optimistic, and there is a risk that the brand is overvalued, and operating expenses incomplete if there is no annual write-off. An intangible asset which is not being amortised should be subject to an annual impairment review according to IAS 38 Intangible Assets. If no such review has been conducted, the asset could be overvalued. The falling revenue ﬁures could indicate that the asset is overvalued. Secondly, a signiﬁant amount has been spent on promoting the brand name during the year. This amount should be expensed, and if any has been capitalised, the brand is overvalued, and operating expenses incomplete.Overvaluation of propertiesThere are two indications from the scenario that properties may need to be tested for impairment, and so could be overvalued. The ﬁst is the potential for distribution centres’ operating licences to be revoked. If this were to occur, the asset would cease to provide economic beneﬁ, triggering the need for an impairment review. Secondly, the average revenue per store has fallen. IAS 36 Impairment of Assets suggests that worse economic performance than expected is an indicator that an asset could be impaired. For these reasons, both stores and distribution centres have the potential to be overvalued.Unrecognised provision/undisclosed contingencyThe revocation of an operating licence could lead to a ﬁe or penalty being paid to the local authority. Two licences have been revoked during the year. The risk is that Jolie Co has not either provided for any amount payable, or disclosed the existence of a contingent liability in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.Opening balances and comparative ﬁuresAs this is our ﬁst year auditing Jolie Co, extra care should be taken with opening balances and comparative ﬁures, as they were not audited by our ﬁm. Additional audit procedures will need to be planned.Tutorial note: More than the required number of ﬁancial statement risks have been described in the answer above. Credit may be awarded for the discussion of other, relevant risks to a maximum of ﬁe ﬁancial statement risks.(c) Principal audit procedures in respect of the JLC brandAgree the cost of the brand to supporting documentation provided by management. A purchase invoice may not be available depending on the length of time since the acquisition of the brand name. Agree the cost of the brand to prior year audited ﬁancial statements.Tutorial note: as this is a ﬁst year audit, no marks will be awarded for procedures relating to prior year working papers of the audit ﬁm.Review the monthly income streams generated by the JLC brand, for indication of any decline in sales.Review the results of impairment reviews performed by management, establishing the validity of any assumptions used in the review, such as the discount rate used to discount future cash ﬂws, and any growth rates used to predict the cash inﬂws from revenue.Perform an independent impairment review on the brand, and compare to management’s impairment review.。

2010年12月份ACCA(国际注册会计师)考试真题(F4)

2010年12月份ACCA(国际注册会计师)考试真题(F4)ALL TEN questions are pulsory and MUST be attempted1 In relation to the Civil Procedure Law of China:(a)explain the term exclusive jurisdiction; (2 marks)(b)state the major legal characteristics of exclusive jurisdiction,in terms of:(i)the basis of exclusive jurisdiction; and (4 marks)(ii)the effect of the rule of exclusive jurisdiction. (4 marks)(10 marks)2 In relation to the Property Law of China:(a)explain the term right of lien; (4 marks)(b)state THREE conditions to be met for a party to claim the right of lien.(6 marks)(10 marks)3 In relation to the Labour Contract Law of China:(a) state the various powers of the labour administration in exercising its supervisory and examining functions;(2 marks)(b) state any FOUR kinds of situations under which the labour administration may issue administrative orders to an employer for violations of Labour Contract Law. (8 marks)(10 marks)4 In relation to the Contract Law of China:(a)explain the term termination of contract; (2 marks)(b)explain and distinguish between termination of contract and dissolution o f contract. (8 marks)(10 marks)5 In relation to the pany Law of China:(a)state the basic rules regarding the shareholders of:(i)a general limited liability pany; (2 marks)(ii)a soleperson limited liability pany and a wholly stateowned pany; and (2 marks)(b)state the requirements for capital of:(i)a general limited liability pany; (2 marks)(ii)a soleperson limited liability pany; and (2 marks)(iii)a pany with exclusive stateownership. (2 marks)(10 marks)6 In relation to the Enterprises Bankruptcy Law of China,state the legal effec t of the acceptance of an application for bankruptcy by the court:(a)in terms of the preservative measures against the assets of the debtor;(4 marks)(b)in terms of the enforcement procedure against the relevant debtor; (4 mar ks)(c)in terms of pending legal actions against a debtor. (2 marks)(10 marks)7 In relation to the Securities Law of China:(a)explain the term sponsor in underwriting securities; (2 marks)(b)state the objective of the legislation to set up the system of sponsorshi p in underwriting securities;(2 marks)(c)state the various legal liabilities of a sponsor,in providing professiona l services,for his wrong doings or failure to perform his functions. (6 marks)(10 marks)8 In 2009 Mr Lee and the villager mittee entered into a contract for the man agement of land,under which he obtained the right to manage the contracted piece of land in a small mountain for 30 years.The contract was duly registered with t he relevant government authority in light of the Property Law.One day when Mr Lee was planting trees on the mountain,he accidentally found a small coal mine in the mountain. Having discovered this information many villa gers rushed to the mountain to exploit coal for sale. Mr Lee demanded the villag ers stop the exploitation of coal,on the ground that he has been a legitimate ho lder of the right of management of land. Therefore，he should be a lawful holder of right to the coal mine under the land. On the other hand,the villagers refuse d to accept Mr Lee‘s position and insisted that Mr Lee’s right to management o f land would not extend to natural resources under the land.They held that the c oal mine should be the mon property of the villagers as a whole and they were en titled to dig coal.Since Mr Lee and the villagers could not reach a settlement themselves,they filed a lawsuit against each other before the court for the determination of rig ht.Required:Answer the following questions in accordance with the relevant provisions of the Property Law of China,and give reasons for your answer:(a)describe what kind of property right Mr Lee has held regarding the mounta in; (2 marks)(b)describe who should hold the ownership of the coal mine in the mountain;(4 marks)(c)state how the court should deal with the claim brought by Mr Lee for dama ges against villagers because some of the trees in the land were destroyed by vi llagers in digging coal. (4 marks)(10 marks)9 Natural Gas pany(Gas pany)and Yaowa Glass pany(Yaowa pany)entered into a s upply contract.The major terms and conditions of the contract were that Gas pany would provide a minimum 4,000 m3 of natural gas daily for a period of five years at a fixed price;it should give a written notice five days in advance where it r educes the quantity of supply;Yaowa pany would provide a sum of RMB 100,000 yuan as a deposit for the performance of the contract. Yaowa pany paid the deposit pu rsuant to the supply contract upon the conclusion of the contract. Gas pany has been in decline since the beginning of 2010. In order to achieve extra profit,Ga s pany sold more natural gas to other customers at a higher price by reducing th e quantity of supply to Yaowa pany.One day Gas pany suddenly stopped providing n atural gas to Yaowa pany without a notice in advance,which resulted in serious d amage to the equipment of the latter.Due to unsuccessful negotiation between the two parties,Yaowa pany intended to seek the assistance from the people‘s court.Required:Answer the following questions in accordance with the relevant provisions of the Contract Law of China,and give your reasons for your answer:(a)explain the legal nature of the deposit under the contract law,and state whether a claim for a refund of twice the amount of the deposit should be suppor ted by the court; (4 marks)(b)state whether a claim requiring specific performance of contract by Gas p any should be supported by the court where the Yaowa pany has already requested a refund of twice the amount of the deposit.(6 marks)(10 marks)10 Kingmart Joint Stock pany(Kingmart pany)was a listed joint stock pany lis ting in Shanghai Securities Exchange,with total assets of RMB 500 million yuan; while Dahua Limited Liability pany’s(Dahua pany)registered capital was RMB 160million yuan.At the end of 2009 the board of directors of Kingmart pany adopted a special board of directors‘ resolution to merge with Dahua pany in a form of merger by absorption. after the pletion of the merger plan Dahua pany would be d issolved. For the purpose of carrying forward the merger plan,Kingmart pany and Dahua pany should take some procedural steps before the merger plan could be imp lemented and settle the credit and/or debt of these two panies with other partie s.Required:Answer the following questions in accordance with the relevant provisions of the pany Law， and give reasons for your answer:(a)state the relevant voting requirement by the general shareholders' meetin g; (3 marks)(b)state the relevant rules with respect to public notice; (3 marks)(c)state how to deal with Dahua p any‘s debts of RMB 500,000 yuan owed to a local electricity plant.(4 marks)(10 marks)332617611。

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