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Financial report

Details of Assignment : You are required to form a team (group) of 3 to 4 m embers. Let your lecturer know the names of your team members. Select a set o f financial statements for a group of companies and obtain approval from your le cturer for the group of companies that you have selected. Please note that two teams may not work on the same group of companies so if another team has already registered their interest in the particular group of companies you w ill be requested to select a different group of companies. Read the annual report including the financial stat ements of the group and write a memorandum to the board of directors clearly explai ning some of the technical aspects of consolidation. Make sure that you draw o n the group’s specific details to explain the intricacies of consolidation to the board, and as much as possible avoid answering in general terms. Some of the aspec ts that you need to cover as a team are (but not restricted to): 1. The composition of the group; namely the subsidi aries, associates, any joint ventures and any other significant investments 2. Why did the parent entity have to prepare consol idated financial statements when the subsidiary company is a separate legal ent ity in its own right? 3. How is the group of companies funded? Share capi tal, debentures? Any options, bonus issues etc. Who owns the group? 4. Does the published set of group financial statem ents reveal the company’s policy on corporate governance? Audit committees? S ustainability? Solvency? Where and why? 5. The non controlling interest – where would you f ind it in the financial statements and what does it represent? Details of a ny direct and indirect non controlling interest? 6. Has there been any goodwill on acquisition? Or a ny gain on bargain purchase? Where would you find it in the financial statements and what does it mean? Any impairment? 7. Does the group have any foreign currency transac tions? Any foreign subsidiary companies? How have they been accounted for in the financial statements? 8. Any other relevant matter that you may wish the board of directors to make note of in respect of some transaction or event, ba lance of account or disclosure that will assist them in understanding t he financial statements of the group.

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