JULY 2025 PROFESSIONAL EXAMINATIONS

CORPORATE REPORTING (PAPER 3.1)

CHIEF EXAMINER’S REPORT, QUESTIONS AND MARKING SCHEME

STANDARD OF THE PAPER

The paper was generally a very moderate paper compared to previous diets. The questions were
based on the syllabus albeit some of the questions were not the usual questions students will
expect. The mark allocation followed the weightings in the syllabus and was fairly allocated to
each sub-question. Most questions were clearly stated and followed higher order learning
outcomes. Questions that required considerable amount of work were commensurate with the
allotted time and marks.

PERFORMANCE OF CANDIDATES

The general performance of candidates in this exam’s diet was poor. Candidates who
performed well demonstrated a clear understanding of the subject matter. The poor level of
preparedness of some candidates is reflected in their poor performance. Some candidates did
not attempt all the questions.

Page 1 of 31
QUESTION ONE

The following consolidated financial statements relate to Akandoh Group (Akandoh), a

public limited company:

Statement of Financial Position as at 31 May

Non-current assets 2025 2024
GH¢’millio GH¢’million
n
Property, Plant and Equipment 1,916 1,624
Goodwill 30 20
Investment in associate 96 78
2,042 1,722
Current assets
Inventories 308 336
Trade receivables 264 224
Financial assets at fair value through profit or loss 32 -
Cash and cash equivalents 316 96
920 656
2,962 2,378
Equity attributable to owners of the parent
Share capital (GH¢1 ordinary shares) 1088 944
Retained earnings 376 330
Revaluation surplus 202 108
1,666 1,382
Non-controlling interests 168 56
1,834 1,438
Non-current liabilities
Long-term borrowings 760 640
Deferred tax liability 76 52
836 692
Current liabilities
Trade and other payables 220 196
Interest payable 16 8
Current tax payable 56 44
292 248
2,962 2,378

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 Statement of Profit or Loss and Other Comprehensive Income for The Year Ended
31 May 2025
GH¢’million
Revenue 1,912
Cost of sales (1,268)
Gross profit 644
Other income 12
Administrative expenses (424)
Finance costs (32)
Share of profit of associate 24
Profit before tax 224
Income tax expense (68)
Profit for the year 156
Other comprehensive income
(items that will not be reclassified to profit or loss):
Gains on property revaluation 116
Share of other comprehensive income of associate 16
Income tax relating to items of other comprehensive income (34)
Other comprehensive income for the year, net of tax 98
Total comprehensive income for the year 254

Profit attributable to:

Owners of the parent 136
Non-controlling interests 20
156
Total comprehensive income attributable to:
Owners of the parent 230
Non-controlling interests 24
254

The following information relates to the consolidated financial statements of

Akandoh:
i) During the period, Akandoh acquired 60% of a subsidiary. The purchase was effected by
issuing shares of Akandoh on a 1 for 2 basis, at their market value on that date of GH¢2.25
per share, plus GH¢52 million in cash.
A statement of financial position of the subsidiary, prepared at the acquisition date for
consolidation purposes, showed the following position:
GH¢’million
Property, Plant and Equipment 184
Inventories 40
Trade receivables 32
Cash and cash equivalents 16
272
Share capital (GH¢1 shares) 160
Reserves 80
Trade payables 24
Income taxes payable 8
272

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ii) An impairment test conducted at the year-end resulted in a write down of goodwill relating
to another wholly owned subsidiary. This was charged to cost of sales. Group policy is to
value non-controlling interests at the date of acquisition at the proportionate share of the
fair value of the acquiree's identifiable assets acquired and liabilities assumed.

iii) Depreciation charged to the consolidated profit or loss amounted to GH¢88 million. There
were no disposals of Property, Plant and Equipment during the year.

iv) Other income represents gains on financial assets at fair value through profit or loss. The
financial assets are investments in quoted shares. They were purchased shortly before the
year end with surplus cash, and were designated at fair value through profit or loss as they
are expected to be sold shortly after the year end. No dividends have yet been received.

v) Included in 'trade and other payables' is the GH¢ equivalent of an invoice for 204 million
shillings for some equipment purchased from a Kenyan supplier. The asset was invoiced
on 5 March 2025, but had not been paid for at the year-end, 31 May 2025. Exchange gains
or losses on the transaction have been included in administrative expenses.
Relevant exchange rates were as follows:
Shillings to GH¢1
5 March 2025 6.8
31 May 2025 6.0

vi) Movement on retained earnings was as follows:

GH¢m
At 31 May 2024 330
Profit attributable to the parent 136
Dividends paid (90)
At 31 May 2025 376

Required:
Prepare a Consolidated Statement of Cash Flows for Akandoh for the year ended 31 May
2025 in accordance with IAS 7: Statement of Cash Flows, using the indirect method.

(Total: 20 marks)

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QUESTION TWO

a) Goldkey Properties (Goldkey) is a leading real estate company dedicated to delivering

innovative, high-quality property solutions across residential, commercial and property
management sectors. It is currently preparing its financial statements for the year ended 31
May 2024.

On 30 September 2023, Goldkey and the Council of Institute of Chartered Accountants,

Ghana (ICAG) entered into a contract to build a 4 storey auditorium for ICAG.

Below is a summary of the terms and conditions of the agreement to construct the property:

i) ICAG paid a non-refundable deposit of GH¢4.8 million to Goldkey and Goldkey began
work on the construction on 1 December 2023.

ii) ICAG will make the following payments:

GH¢6.4 million on 31 May 2024 when 30% complete.
GH¢6.4 million on 30 November 2024 when 60% complete.
GH¢8.8 million on 31 May 2025 on completion and transfer of the facility.

iii) There is no significant financing component in the contract, and the project is expected to
be completed within 18 months in compliance with ICAG's instructions. If the facility is
not completed and transferred to ICAG by 31 May 2025, then the final payment will be
reduced by GH¢800,000 for every complete month after 31 May 2025.

The management of Goldkey have made the following additional estimates:

 Plant purchased by Goldkey for GH¢12.8 million on 1 December 2023 would be used
exclusively on the contract with ICAG until its completion, then used on other contracts.
At the date of purchase, the estimated useful life of this plant was five years.
 Goldkey will incur material and direct labour costs of GH¢960,000 per month to fulfil the
contract with ICAG. The costs will continue at this rate until the facility is completed. There
are no inventories of unused materials at any time.

Materials which had been purchased for use on the contract with ICAG were damaged due
to the negligence of Goldkey’s employees. This resulted in Goldkey incurring a one-off
additional cost of GH¢1.6 million during March 2024 to rectify this damage. As a result,
Goldkey now expects the facility to be transferred to ICAG by 15 July 2025.

The contract is expected to be profitable overall. On 31 May 2024, the contract was
confirmed to be exactly 30% complete, so ICAG made the payment due on this date. ICAG
is reliably expected to make the payment due under the contract on 30 November 2024 on
this date.

Required:
In accordance with IFRS 15: Revenue from Contracts with Customers, show how the
transactions described should be accounted for in the financial statements of Goldkey for
the year ended 31 May 2024. (8 marks)

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b) Zabzugu, a parent company had 6 million, GH¢1 fully paid ordinary shares outstanding on
1 June 2024. On 1 October 2024, the company made a consolidation of existing shares in
issue (i.e. a reverse share split) at nominal value, on a 2 for 3 basis. There was no special
dividend, share repurchase or other outflow of resources. Having completed the
consolidation of shares, a new share issue for 600,000 shares was made through an offer
for sale at the market price of GH¢1.55 per share. The allotment was made on 1 March
2025 and the proceeds were due on 1 April 2025.

The company's (summarised) statement of profit or loss for the year ended 30 June
2025 as published is shown below:
GH¢'000
Revenue 15,740
Cost of sales and expenses (16,060)
Loss before interest and tax (320)
Finance cost (128)
Loss for the year (448)

Profit/(loss) attributable to:

Owners of the parent (478)
Non-controlling interests 30
(448)

The company also had in issue GH¢500,000 of 5% cumulative redeemable preference

shares throughout the year ended 30 June 2025.

Required:
In accordance with IAS 33: Earnings Per Share, calculate the basic earnings per share
figure for the year ended 30 June 2025. (5 marks)

c) You are the Director of Finance at Gyampoh LTD and a Chartered Accountant. You are
finalising the financial statements for the year ended 30 September 2024. There is a
provision of GH¢500,000 shown in the draft statement of financial position which relates
to outstanding lawsuit for the supply of faulty products, prior to the year end, by Gyampoh
LTD to a number of customers. This amount has been recognised as a provision based on
advice from Gyampoh LTD’s lawyers that the claims are very likely to succeed within the
next six months, which has led to some adverse publicity. The products were withdrawn in
August 2024.
Since recognising the above provision, Gyampoh LTD discovered that there are additional
50 faulty products still in circulation. Gyampoh LTD’s lawyers estimated that for each
product GH¢350 would need to be paid.

During the year, Gyampoh LTD started offering a one-year repair warranty with its luxury
products. If minor repairs were required for all the relevant goods sold the cost would be
GH¢65,000, compared to GH¢157,000 if major repairs were required. Gyampoh LTD
estimates that 20% of the goods sold will require minor repairs and 5% will require major
repairs.

No provision was recognised in respect of the warranties for the year ended 30 September
2024 as no goods had been returned by this date.

Page 6 of 31
 Required:
In accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets,
show the accounting treatment of the above transactions in the financial statements of
Gyampoh LTD. (4 marks)

d) The objective of IAS 41: Agriculture is to establish standards of accounting for agricultural
activity – the management of the biological transformation of biological assets (living
plants and animals) into agricultural produce (harvested product of the entity's biological
assets).

Required:
State the provisions of IAS 41 regarding recognition and measurement of biological assets
and agricultural produce in the preparation and presentation of financial statements.
(3 marks)

(Total: 20 marks)

QUESTION THREE

a) In 2024, Afariwaa Renewables PLC (AR) signed an agreement to partner with another
clean energy powerhouse, Mankralo Wind Power PLC (MWP), to carry out its Bono and
Ahafo offshore wind development projects (referred hereafter as BA Projects). Both energy
companies will continue to drive the delivery of these flagship projects. BA Projects are
expected to be capable of producing wind turbines that can power up to 500,000 Ghanaian
homes with green electricity.
The contractual arrangement between the two parties specifies the following aspects of the
arrangement:
 MWP is to acquire a 30% stake in the landmark renewable energy projects while AR, with
a 70% share, will be in charge of development, construction and operation throughout the
life cycle of the projects. Each party will appoint three directors and unanimous consent is
required for all resolutions to be passed.

 Under the terms of the arrangement, AR and MWP have agreed to purchase all the output
(i.e. the total power the wind turbines can generate) produced by BA Projects in a ratio of
7:3 for onward transmission over their own electric grids.

 Output from the BA Projects is not permitted to be sold to any third parties, unless this is
approved by the two parties. But in any case, such external sales are expected to be very
rare and cannot exceed six percent in volume and value. The price of the output sold to the
parties to be set by both parties at a level that is designed to ensure that BA Projects operate
at a break-even level.

Required:
In line with IFRS 11: Joint Arrangements, advise the directors of AR on how to account
for BA Projects. (5 marks)

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b) Akorabo Wares PLC (AW) has identified seven (7) divisions as operating segments. The
following information is available in relation to the revenue, profit/loss and assets of these
segments and other businesses for the year to 31 October 2024:
Operating Segment External Inter-segment Profit/(Loss) Assets
sales sales
GH¢000 GH¢000 GH¢000 GH¢000
Metals 3,500 6,200 1,560 6,350
Farming equipment 2,990 0 (390) 3,300
Home appliances 2,450 0 (110) 2,960
Furniture 3,560 950 250 4,330
Plumbing materials 1,600 1,100 310 3,240
Glassware 4,880 3,970 1,080 7,600
Sporting goods 3,940 0 (130) 4,980
22,920 12,220 2,570 32,760
Other businesses 5,600 0 940 6,100
28,520 12,220 3,510 38,860

Management has determined that the operating segments do not have similar economic
characteristics and share a majority of the aggregation criteria of IFRS 8. Both ‘Metals’ and
‘Plumbing materials’ segments did not meet the quantitative thresholds in the previous year
2023.

Required:
In accordance with IFRS 8: Operating Segments, identify and justify with suitable
computations which of the segments should be deemed as reportable segments of AW for
the current period. (5 marks)

c) Sustainability reporting has developed and evolved over the past 30 years. A number of
organisations have developed frameworks for reporting on sustainability matters.

Required:
Discuss the role of the following in establishing standards for reporting on sustainability
matters:
i) Global Reporting Initiative (GRI).
ii) The Sustainability Accounting Standards Board (SASB).
iii) The Taskforce on Climate-Related Financial Disclosures (TCFD).
(10 marks)

(Total: 20 marks)

Page 8 of 31
QUESTION FOUR

a) In recent times, many Ghanaian businesses have had to navigate their way through the
economic ravages of rising geopolitical tensions, global health crises, depressed local
macroeconomy and disrupted supply chains. These harsh business conditions have
combined to render several corporate balance sheets unhealthy.

Kwankora LTD, a large pharmaceutical company in Ghana, is one of such businesses to

have been badly affected. Despite multiple attempts to agree on a scheme to carry out an
internal balance sheet clean-up, special resolution could not be reached during any of these
negotiations. So, the directors have now resolved to set up a new company, Bitita LTD, to
take over Kwankora LTD. Below is the latest statement of financial position of Kwankora
LTD as at 31 August 2024.

Summarised Statement of Financial Position of Kwankora LTD as at 31 August 2024

GH¢000
Non-current assets
Tangible assets 11,050
Intangible assets 2,330
13,380
Current assets
Inventories 3,320
Trade receivables 1,880
Cash at bank 960
6,160
Total assets 19,540

Equity and liabilities

Ordinary shares (GH¢1 each) 12,000
Preference shares (GH¢1 each) 4,500
OCI 500
Retained earnings (6,300)
10,700
Non-current liabilities
12% Loan Notes 5,000
Current liabilities
Trade Payables 3,840
Total equity and liability 19,540

The terms of the external reconstruction are provided below:

1) The new company to be formed to take over all assets (except cash) and liabilities of
Kwankora LTD as at 31 August 2024.
2) 4 million ordinary shares of GH¢2.50 each in Bitita LTD, credited as GH¢1.50 per share
paid up, to be issued to the liquidator of Kwankora LTD for the benefit of Kwankora LTD’s
ordinary shareholders who have agreed to pay up the balance of GH¢1.00 per share
immediately after the reconstruction.
3) 2 million preference shares of GH¢2 of Bitita LTD, credited as GH¢1.80 per share paid up,
to be issued to liquidators of Kwankora LTD for the benefit of Kwankora LTD’s preference
Page 9 of 31
 shareholders, who have agreed to pay the balance of GH¢0.20 per share immediately after
the reconstruction. In addition, GH¢650,000 in 12.5% debentures (redeemable after 5
years) in Bitita LTD is to be issued as compensation for arrears of preference dividends.
4) Loan notes to be discharged by the issue of sufficient number of new 12.5% loan notes of
Bitita LTD as would yield the same cedi amount of interest.
5) Bitita LTD to bear the reconstruction costs of GH¢350,000 as part of the purchase
consideration.
6) All assets (except intangible assets and receivables in note (7)) to be taken over by Bitita
LTD at 20% discount. Intangible assets are to be transferred to Bitita LTD at nil amount.
7) One customer, who owes an amount of GH¢300,000, to settle her debt after agreeing to a
10% discount.
8) All reserves to be capitalised.

The following information is also relevant:

1) Bitita LTD is to immediately procure a new plant, which will be used to produce new and
green-friendly drugs, under a six-year lease agreement. The present value of all future lease
payments is estimated at GH¢1.2 million. Lease payments will be made annually in
arrears, and the present value of the first annual payment is GH¢300,000.

2) Kwankora LTD currently has unutilised tax credits of GH¢520,000. No deferred tax asset
relating to these credits is currently included in the above statement due to lack of sufficient
future taxable profits. Bitita LTD is however projected to start making profits right from
its first year of operations.

Required:
Assuming that all the above provisions of the scheme are fulfilled,
i) Prepare in the books of Kwankora LTD:
 Realisation Account
 Bitita Account
 Sundry Members’ accounts
(10 marks)

ii) Prepare opening statement of financial position of Bitita LTD as at 1 September 2024.
(5 marks)

b) Step by step approach is suggested for the preparation of a consolidated statement of

financial position.

Required:
Detail FIVE steps necessary to prepare a consolidated statement of financial position as at
the acquisition date. (5 marks)

(Total: 20 marks)

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QUESTION FIVE

a) Krapa Energies PLC (Krapa), a largely foreign-owned firm, is a well-established energy

firm with operations in Ghana and three other countries within the West Africa sub region.
Krapa operates under two operating segments, with one segment supplying conventional
(non-renewable) and the other supplying renewable energy (solar and wind power).
Governments of the four countries aim to limit the use of non-renewable energies in the
next three to ten years.

Krapa is currently under review for an energy-sector 3-year credit facility from Gyapa
Energy Bank, and you are in charge of evaluating Krapa’s financial situation and prospects.

Below are the latest financial statements (together with the comparatives) of Krapa:
2024 2023
GH¢'million GH¢’million
Revenue 6,300 5,100
Cost of sales (3,940) (3,500)
Gross profit 2,360 1,600
Operational costs (650) (490)
Distribution costs (460) (440)
Finance costs (80) (95)
Profit before tax 1,170 575
Income tax (240) (105)
Profit after tax 930 470
Profit attributable to non-controlling interests (63) -
Profit attributable to parent’s owners 867 470

2024 2023
GH¢’million GH¢’million
Assets
Tangible assets 4,140 3,580
Defined benefit plan 800 420
Inventory 1,845 1,346
Trade receivables 1,120 1,080
Cash at bank 660 754
Total assets 8,565 7,180

Equity and liabilities

Share capital 1,500 1,500
Retained earnings 2,760 2,020
Non-controlling interests 225 -
Share appreciation rights (exercisable in 830 750
2026)
Dollar-denominated bonds (2028) 1,550 1,140
Government Grant (Note 1) 400 500
Trade payables 1,300 1,270
Total equity and liabilities 8,565 7,180

Page 11 of 31
 Additional information:
i) The government grant was obtained on 1 September 2022 and relates entirely to acquisition
of a clean energy processing facility. The figures shown above represent the correct
amounts of total amortised grant at the end of both years. GH¢50 million of the unamortised
grant balance at 31 August 2024 will be amortised in 2025

ii) Relevant information relating to the two operating segments for the two years are provided
below:
2024 2023
Renewable Conventional Renewable Conventional
Energy Energy Energy Energy
GH¢’million GH¢’million GH¢’million GH¢’million
Revenues:
External 1,960 3,948 1,120 3,750
Internal 140 252 80 150
2,100 4,200 1,200 3,900
Operating costs (1,510) (3,540) (1,020) (3,420)
Profit from 590 660 180 480
operations

Required:
i) Calculate the following ratios based on both 2023 and 2024 financial statements:
 Operating profit margins (the entity and the two segments).
 Return on capital employed.
 Inventory turnover (in times).
 Acid-test ratio.
 Debt(interest-bearing)/equity ratio.
(7 marks)

ii) Write a memo to the credit approving team to provide assessment of financial and long-
term viability of Krapa based on the above financial ratios. Your analysis should also
discuss how the performance of the two segments can help explain Krapa’s overall
performance as far as the information permits. (8 marks)

b) Data analytics can be categorized as descriptive analytics, predictive analytics and

prescriptive analytics.

Required:
Explain these categories, giving an example each. (5 marks)

(Total: 20 marks)

Page 12 of 31
SUGGESTED SOLUTION
QUESTION ONE

Akandoh Group
Statement of Cash Flows for The Year Ended 31 May 2025
GH¢m GH¢m
Cash flows from operating activities:
Profit before taxation 224
Adjustments for:
Depreciation 88
Impairment losses on goodwill (W2) 6
Foreign exchange loss (W8) 4
Investment income – share of profit of associate (24)
Investment income – gains on financial assets at fair value through profit (12)
or loss
Interest expense 32
94
Cash flows from operating activities before working capital changes 318
Increase in trade receivables (264 – 224 – 32) (8)
Decrease in inventories (308 – 336 – 40) 68
Decrease in trade payables (220 – 196 – 24 – (W8) 34 PPE payable) (34)
26
Cash generated from operations 344
Interest paid (W7) (24)
Income taxes paid (W6) (74)
(98)
Net cash inflows from operating activities 246

Cash flows from investing activities:

Acquisition of subsidiary, net of cash acquired (52 – 16) (36)
Purchase of property, plant and equipment (W1) (50)
Purchase of financial assets (W4) (20)
Dividend received from associate (W3) 22
Net cash used in investing activities (84)
Net cash inflows before financing activities 162

Cash flows from financing activities:

Proceeds from issuance of share capital
(1088 – 944 – (160 *60%/2 * GH₵2.25)) 36
Proceeds from long-term borrowings (760 – 640) 120
Dividend paid (90)
Dividends paid to non-controlling interests (W5) (8)
Net cash inflows from financing activities 58
Net increase in cash and cash equivalents 220
Cash and cash equivalents at the beginning of the year 96
Cash and cash equivalents at the end of the year 316

Page 13 of 31
Workings GH¢m GH¢m
(1) Property, Plant & Equipment (Additions)
b/d 1,624
Revaluation 116
Acquisition of subsidiary 184 Depreciation 88
Additions on credit (W8) 30
Cash (β) 50 C/d 1,916
2,004 2,004

(2) Impairment losses on goodwill

b/d 20
Acquisition of subsidiary Impairment losses (β) 6
((160*60%/2 * 2.25)+52+(240*40%))
– 240 net assets 16 c/d 30
36 36

(3) Dividends received from associates – Investment in Associate

B/d 78
P/L 24 Dividends received (β) 22
OCI 16
C/d 96
118 118

(4) Purchase of Financial Assets – Financial Assets @ Fair Value Through Profit or
Loss
B/d 0
P/L 12 C/d 32
Addition(β) 20
32 32

(5) Dividends paid to Non-Controlling Interests

Dividends paid (β) 8 B/d 56
C/d 168 TCI 24
Acquisition of subsidiary
(240*40%) 96
176 176

(6) Income Taxes payable

Income Taxes paid (β) 74 B/d deferred tax 52
c/d deferred tax (68 + 8) 76 b/d current tax 44
c/d current tax 56 P/L 68
OCI 34
Acquisition of subsidiary 8
206 206

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 (7) Interest Payable
Interest paid (β) 24 B/d 8

c/d 16 P/L 32
40 40

GH¢m GH¢m
(8) Foreign currency transaction
Transactions recorded on:
(1) 5 March DEBIT Property, plant and equipment 30
(204m/6.8)
CREDIT Payables 30
(2) 31 May Payable = 204m/6.0 = GH¢34m
DEBIT P/L (Admin expenses) 4
CREDIT Payables (34 – 30) 4

(Total: 20 marks)

EXAMINER’S COMMENTS

This question on consolidated statement of cash flows was very unpopular and unexpected
although the question was very straightforward. Few students could identify the effect of
group transactions on the consolidated statement of cash flows. Candidates appeared
unprepared, and that reflected in the relatively poor responses to the question. Most
candidates had little or no knowledge about consolidated cash flow statements.

Those with some knowledge in cash flow statements could not classify items under the
appropriate components in a cash flow statement. Some candidates deviated from the
question and produced format akin to consolidated statements of financial position rather
than consolidated cash flow statements. Candidates who appeared on track struggled with
the workings, and that impacted unfavourably on their scores.

It is recommended that the topic on cash flow statements be treated thoroughly by tutors
and students. Candidates are advised to prepare adequately and solve past questions before
taking the paper.

Page 15 of 31
QUESTION TWO

a) Given the information provided, it is reasonable to assume on 31 May 2024 the progress
Goldkey has made towards satisfaction of the performance obligation is 30% complete.

The next stage of the revenue recognition process is to measure the expected transaction
price (total revenue receivable) under the contract. In this case, the expectation of total
revenue would have been reduced by the fact that a delay is expected to the completion of
the contract by Goldkey. Therefore, there is an element of variable consideration.
(0.5 mark)

IFRS 15 requires us to take this into account provided the variable element can be reliably
measured. The expected total revenue receivable by Goldkey is 25.6 million (W1). Since
the contract is 30% complete by 30 May 2024, Goldkey should recognise revenue of
GH¢7.68 million (GH¢25.6 million x 30%) in the current period. GH¢7.68 million will be
recognised in the statement of profit or loss for the year ended 30 May 2024.
(0.5 mark)

The costs which relate directly to the contract include:

 the month-by-month labour and material costs; and
 the depreciation of the plant and equipment which is being used on the contract.

Goldkey would also need to recognise the following cost as an expense when incurred:
 the cost of wasted materials which were not reflected in the initial pricing of the contract.
(0.5 mark)

Therefore, the total direct costs of fulfilling the contract to 30 May 2024 will be GH¢7.04
million (W2). The wasted materials of GH¢1.6 million would also need to be expensed, but
do not relate directly to the contract so would likely be recorded within administrative
expenses. All of the costs (GH¢7.04 + GH¢1.6 = GH¢8.64 million) will be recognised in
profit or loss.
(0.5 mark)

IFRS 15 requires the statement of financial position should show a contract asset or contract
liability, depending on the relationship between the revenues and the amounts received
from customers. In this case, Goldkey will recognise a contract liability of GH¢3.52 million
(W3). This will be shown as a current liability in the statement of financial position at 30
May 2024. The plant and equipment used on the contract will be shown as a non-current
asset in the statement of financial position at 30 May 2024. Its carrying amount will be
GH¢11.52 million (GH¢12.8 million – GH¢1.28 million (W2)).
(1 mark)

Page 16 of 31
 W1 – Expected total revenue receivable by Goldkey
Date Amount Explanation
(GH¢’000)
1 December 2023 4,800 Initial deposit
31 May 2024 6,400 Payment 1
30 November 2024 6,400 Payment 2
15 July 2025 8,000 (GH¢8.8m – GH¢0.8m due to late completion)
25,600

W2 – Costs to date on the contract

Cost type Incurred to date GH¢’000
Overheads (GH¢0.96 million per month x 6) 5,760
Depreciation (GH¢12.8 million x 6/60) 1,280
31 May 20224 7,040

W3 – Contract liability at 31 May 2024

Dr GH¢’000 Cr
GH¢’000
Revenue recognised to date (30% x 25,600) 7,680
Payments received from ICAG to date (4,800+6,400) 11,200
Contract liability at 31 May 2024 (11,200 – 7,680) 3,520
11,200 11,200

(5 marks)

b)
Date Narrative Number of Time Bonus Weighted
shares fraction average
01-June 2024 b/d 6,000,000 x 3/12 x 2/3 1,000,000
01-October Stock
2024 consolidation
(6,000,000/3 x 1) (2,000,000)
(6,000,000 x 2/3) 4,000,000 x 6/12 2,000,000
01-April 2025 Issue at market 600,000
price
c/d 4,600,000 x 3/12 1,150,000
4,150,000

 The shares allotted are included from the date the cash is receivable (1 April 2025), IAS
33 para 21(a).
 Basic earnings per share = (GH¢478,000)/4,150,000 = 11.5 pesewas loss per share.

As the preference shares are redeemable, they are accounted for as a financial liability under
IAS 32 Financial Instruments: Presentation and therefore the dividend payment is treated
as a finance cost, so no further adjustment to earnings is required as the dividend is included
in finance costs.
(5 marks)

Page 17 of 31
c) Provision
GH¢ GH¢
Provision for outstanding lawsuits (Balance b/f) 500,000
Additional lawsuits provision for 50 faulty products (50 x 350) 17,500
Warranties – Minor repairs (65,000 x 20%) 13,000
– Major repairs (157,000 x 5%)) 7,850
38,350
Balance c/f (At 30 September 2024) 538,350

Entries
Dr Expense 38,350
Cr Contingent Liability 38,350

(4 marks)

d) Recognition and Measurement of IAS 41

 IAS 41 dictates that biological assets and agricultural produce should be recognized when
an entity controls the asset, future economic benefits are probable and fair value or cost can
be measured reliably.
(1.5 marks)

 Biological assets are initially measured at fair value less costs to sell, and agricultural
produce at fair value less costs to sell at harvest. Gains and losses from changes in fair value
are recognized in profit or loss in the period they arise.
(1.5 marks)

(Total: 20 marks)

EXAMINER’S COMMENTS

This question on selected accounting standards (IFRS) was not expected to be a difficult
question for most candidates. Only one standard was unfamiliar with students – IAS 41:
Agriculture. The question focused on four standards: IFRS 15: Revenue from Contract
with Customers, IAS 33: Earnings per Share, IAS 37: Provisions, Contingent Liabilities
and Contingent Assets and IAS 41: Agriculture. Most of the candidates did not attempt
sub-question (d) on recognition and measurement of biological assets (IAS 41:
Agriculture)

Overall, performance was low and below expectations. It seems candidates were unfamiliar
with these standards. Over 90% of the candidates scored below ten marks out of the twenty
marks allocated to this question. Majority of the candidates wrote theories instead of
showing calculations and relevant entries with reference to the standards.

Overall, question two was partly answered. Some candidates did not attempt this question
at all. ICAG should emphasise revision on standards to enhance better appreciation by
students.

Page 18 of 31
QUESTION THREE

a) IFRS 11 identifies and distinguishes between two joint arrangement types: joint venture
and joint operations.
In joint ventures, the venturers have rights to the arrangement’s net assets while in joint
operations, the operators have rights to the assets, and obligations for the liabilities, relating
to the arrangement.
If a joint arrangement is not structured through a separate legal entity, it is always accounted
for as a joint operation.
However, if a joint arrangement is structured through a separate legal entity, then the
classification will depend on the rights and obligations of the parties to the joint
arrangement.

Clearly, VW Projects is an independent entity and therefore, its classification requires

further analyses. But it can be concluded that from the above that:
 The obligation of the parties to purchase all the output produced by the entity reflects the
exclusive dependence of the entity upon the parties for the generation of cash flows and,
thus, the parties have an obligation to fund the settlement of the liabilities of the entity.
 The fact that the parties have rights to all the output produced by the entity means that the
parties have rights to all the economic benefits of the assets of the entity.
 This is further strengthened by that fact if VW were allowed to sell outside under those rare
circumstances the sale would create no profit to position the project to meet its own
liabilities.
 These facts and circumstances indicate that the arrangement is a joint operation.
And the conclusion about the classification of the arrangement would not change just
because the two parties would be transmitting and selling their share of the produced power
to their own external clients.
Therefore, AR would have to recognise its share of assets, liabilities, income and
expenses associated with VW Projects throughout the arrangement’s lifecycle unless
material changes occur to its terms.
(5 marks)

b) IFRS 8 requires that once an operating segment has been identified the entity needs to report
segment information if the segment meets any of the following quantitative thresholds:
 its reported revenue (external and inter-segment) is 10% or more of the combined
revenue, internal and external, of all operating segments
 its reported profit or loss is 10% or more of the greater, in absolute amount, of (i) the
combined profit of all operating segments that did not report a loss and (ii) the combined
loss of all operating segments that reported a loss or
 its assets are 10% or more of the combined assets of all operating segments.

IFRS 8 states that if the total external turnover reported by the operating segments identified
by the size criteria is less than 75% of total entity revenue then additional segments need
to be reported on until the 75% level is reached.

Apply the above principles to Andani Wares Plc (AW) as follows:

i) The total revenue (external and internal) of AW’s operating segments is GH¢35.14m
(GH¢22.92m + GH¢12.22m). So, an operating segment must have revenue of at least
GH¢3,514,000 to satisfy the first 10% test.

Page 19 of 31
ii) The combined profits of profitable segments are GH¢3.2m (GH¢1.56m + GH¢0.25m +
GH¢0.31m + GH¢1.08m) and combined losses of lossmaking segments are GH¢0.63m
(GH¢0.39m + GH¢0.11m + GH¢0.13m). The larger of these is GH¢3.2m. So, a segment
must have a profit or loss of at least £ GH¢320,000 to satisfy the second 10% test.
iii) The combined assets of all seven operating segments are GH¢32.76m. So, a segment must
have assets of at least GH¢3,276,000 to satisfy the third 10% test.
iv) The results of the three 10% tests for each operating segment are as follows:
Total Profit/(Loss) Assets at
revenue at at least least Reportable
least GH¢0.32m GH¢3.276m segment
GH¢3.514m
Metals Yes Yes Yes Yes
Farming No Yes Yes Yes
equipment
Home No No No No
appliances
Furniture Yes No Yes Yes
Plumbing No No No No
materials
Glassware Yes Yes Yes Yes
Sporting goods No No Yes Yes

‘Home appliances’ and ‘Plumbing materials’ segments fail all three of the 10% tests, so
these will not be reportable as long as the remaining segments satisfy the 75% test and
much more so given that the aggregation criteria are not met.
75% of the company's total external revenue is GH¢21.39m (75% × GH¢28.52m). The total
external revenue of reportable segments is GH¢18.87m (3.5m + 2.99m + 3.56m + 4.88m +
3.94m) so the 75% test is not satisfied.

Information about other business activities and operating segments that are
not reportable – Home appliances and Plumbing materials – shall be combined and
disclosed in an ‘all other segments’ category separately from other reconciling items in the
reconciliations required by paragraph 28 of IFRS 8.

IFRS 8 requires that segment data for a prior period presented for comparative purposes
shall be restated to reflect the fact that Metals segment has become a reportable segment in
the current period.
(5 marks)

Page 20 of 31
c)
i) Global Reporting Initiative
The Global Reporting Initiative (GRI) was founded in 1997 as an international not-forprofit
organisation whose mission is to make sustainability reporting standard practice.GRI
publish an influential set of standards on sustainability. The first GRI guidelines were
published in 1999 and have evolved into the GRI Sustainability Reporting Standards (GRI
Standards). The standards are used by several thousand organisations, in over 90 counties
and are referenced in over 20 stock exchanges and in legislation and regulation in over 40
countries.

The GRI Standards are structured as a set of interrelated standards issued in a modular
structure and comprise:

Universal standards (100 series)

 GRI 101: Foundation — sets out reporting principles;
 GRI 102: General disclosures — contextual information about the organisation and its
sustainability practices;
 GRI 103: Management approach — how an organisation manages a material topic and to
be used for each material topic in a sustainability report.

Topic specific standards

 200 series (economic topics)
 300 series (environmental topics)
 400 series (social topics)
They have been developed primarily to be used together to help an organisation prepare a
sustainability report which is based on the reporting principles and which focuses on
material topics.

ii) The Sustainability Accounting Standards Board (SASB)

SASB was established in 2011 as an independent non-profit organisation. It subsequently
merged with the International Integrated Reporting Council (Section 2) to form the Value
Reporting Foundation (VRF). The VRF was then consolidated into the IFRS Foundation in
2022.The SASB publishes sustainability accounting standards which provide disclosure
guidance on sustainability for mandatory filings to the U.S. Securities and Exchange
Commission (SEC).

SASB produces standards for different industries. Each standard is comprised of:
 disclosure guidance; and
 accounting standards on sustainability topics for use by U.S. and foreign public companies
in their annual filings with the U.S. Securities and Exchange Commission (SEC).

The disclosure guidance identifies sustainability topics at an industry level, which may be
material to a company within that industry, depending on that company's specific operating
context. Each company is ultimately responsible for determining those sustainability topics
that are material to it.

Page 21 of 31
iii) The Task Force on Climate-Related Financial Disclosures (TCFD)
The TCFD was established by the Financial Stability Board (based in Switzerland)
in 2015 to develop recommendations on the types of information that companies
should disclose to support investors, lenders and insurance underwriters in assessing
and pricing risks related to climate change.

In 2017 it issued its TCFD Framework which provides disclosure recommendations that
focus on climate-related risks and opportunities and are structured around four key areas:
governance, strategy, risk management and metrics and targets. The recommended
disclosures are:

Governance  Describe the board's oversight of climate-related risks and

opportunities
 Describe management's role in assessing and managing climate
related risks and opportunities
Strategy  Describe the climate-related risks and opportunities the
organisation has identified over the short, medium and long
term
 Describe the impact of climate-related risks and opportunities
on the organisation's businesses, strategy and financial planning
 Describe the resilience of the organisation's strategy, taking into
consideration different climate-related scenarios
Risk  Describe the organisation's processes for identifying and
Management assessing climate-related risks
 Describe the organisation's processes for managing climate
related risks
 Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation's overall
risk management
Metrics and  Disclose the metrics used by the organisation to assess
targets climate-related risks and opportunities in line with its strategy
and risk management process
 Disclose greenhouse gas emissions and related risks Describe
the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets

This structure has been adopted by both the International Sustainability Accounting
Board and the European Union for their sustainability reporting standards.
(10 marks)

(Total: 20 marks)

Page 22 of 31
 EXAMINER’S COMMENTS

The question was in three parts. The first part focused on IFRS 11: Joint Arrangements.
The second part was on IFRS 8: Operating Segments. The third part was on sustainability
issues.

On the question on joint arrangements, some candidates were able to clearly identify and
distinguish between two joint arrangement types: joint venture and joint operations. They
were able to indicate that based on the facts and circumstances the arrangement is a joint
operation. Most candidates however missed the fact the classification of the arrangement
would not change just because the two parties would be transmitting and selling their share
of the produced power to their own external clients.

For the question on segment reporting, it is important to note that IFRS 8 requires that once
an operating segment has been identified, the entity needs to report segment information if
the segment meets any of the following quantitative thresholds:
 its reported revenue (external and inter-segment) is 10% or more of the combined revenue,
internal and external, of all operating segments
 its reported profit or loss is 10% or more of the greater, in absolute amount, of (i) the
combined profit of all operating segments that did not report a loss and (ii) the combined
loss of all operating segments that reported a loss or
 its assets are 10% or more of the combined assets of all operating segments.

Candidates got the concept well but most of them were unable to apply it to the question
correctly. Majority of candidates were able to indicate at least one of the thresholds and
hence earned some marks.

The third part of the question on sustainability was much of a recall question. Candidates
were required to restate the provisions of the Global Reporting Initiative (GRI) standards,
Sustainability Accounting Standards Board (SASB) disclosure guidance and Task Force on
Climate-Related Financial Disclosures (TCFD) structured around four key areas:
governance, strategy, risk management and metrics and targets. Candidates performed well
in the responses they provided.

Page 23 of 31
QUESTION FOUR

a)
i) Realization account
GH¢000 GH¢000
Tangible assets 11,050 Discount on 12% loan notes 200
Intangible assets 2,330 (5,000 – 4,800)
Inventories 3,320 Preference shares 900
Trade receivables (1,880 – 300) 1,580 (4,500 – 3,600)
Customer discount (10% x 300) 30 Purchase consideration (W1) 15,400
Reorganization costs 350 Trade payables 3,840
Preference dividend 650
Gain on realization 1,030
20,340 20,340

ii) Bitita account

GH¢000 GH¢000
Purchase consideration 15,400 Investment in Bitita’s 6,000
ordinary shares (W1)
Investment in Bitita’s 12.5% 5,450
loan notes (W1)
Investment in Bitita’s 3,600
preference shares (W1)
Bank: reconstruction costs 350
15,400 15,400

iii) Sundry Members’ Account

Pref Ord. Pref Ord.
Shares Shares Shares Shares
GH¢000 GH¢000 GH¢000 GH¢000
Retained earnings - 6,300 Balance b/d 4,500 12,000
Realization 900 - Cumulative OCI - 500
Balance c/d 3,600 7,230 Gain on realization - 1,030
4,500 13,530 4,500 13,530
Bitita’s ord. shares - 6,000 Balance b/d 3,600 7,230
Cash settlement (W2) - 1,230
Bitita’s pref. shares 3,600 -
3,600 7,230 3,600 7,230

Page 24 of 31
 Workings

W1
Purchase consideration
Issue of Bitita’s ordinary shares:
To ordinary shares (4,000 x 1.5) 6,000
Issue of Bitita’s 12.5% debentures:
To preference dividends 650
To 12% Loan notes (12%/12.5% x 5,000) 4,800 5,450
Issue of Bitita’s preference shares
To preference shares (2,000 x 1.80) 3,600
Cash for reconstruction costs 350
15,400

W2 Bank Account – Kwankora

GH¢000 GH¢000
Balance b/d 960 Realization 350
Bitita: reconstruction costs 350 Sundry members:
Trade receivables (90% x 300) 270 Final settlement 1,230
1,580 1,580

b)
Statement of financial position of Bitita Ltd as at 1 September 2024
GH¢000
Non-current assets
Tangible assets (11,050 x 80%) 8,840
Right-of-use asset 1,200
Goodwill (W2) 6,480
16,520
Current assets
Inventories (3,320 x 80%) 2,656
Trade receivables (1,580 x 80%) 1,264
Bank (W1) 4,050
7,970
Total assets 24,490
Equity and liabilities
Ordinary shares (6,000 + 4000 W1) 10,000
18% Preference shares (3,600 + 400 W1) 4,000
14,000
Non-current liabilities
12.5% Debentures 5,450
Lease payable (1,200 – 300) 900
6,350
Current liabilities
Trade payables 3,840
Lease payable 300
Total equity and liability 24,490

Page 25 of 31
 Workings

W1 Bank account – Bitita

GH¢000 GH¢000
Ordinary shares (4000x1) 4000 Realization 350
Preference shares (2000x0.2) 400 Balance c/d 4,050
4,400 4,400

W2 Goodwill
GH¢000
Purchase consideration 15,400

Less Net Assets Acquired:

Tangible assets 8,840
Inventories 2,656
Trade receivables 1,264
Trade payables (3,840)
8,920
Goodwill 6,480

The unutilized tax credits relating to the liquidated company cannot be transferred to the
new company, a separate legal person, and hence, despite the expectation of sufficient
future taxable profits by the new company no deferred tax asset should be recognized.
(60 ticks @ 0.25 for 15 marks)

c) Steps necessary to prepare a consolidated statement of financial position at the acquisition

date.
1) Establish the group share (parent company share) in the subsidiary and the percentage
owned by non-controlling interests.
2) Perform double entry to record any individual company adjustments that might be
necessary.
3) Set out a pro-forma statement of financial position.
4) Calculate the net assets of the subsidiary at the acquisition date.
5) Calculate goodwill
6) Calculate non-controlling interest
7) Calculate consolidated retained earnings
(5 relevant points @ 1 mark each = 5 marks)

(Total: 20 marks)

Page 26 of 31
EXAMINER’S COMMENTS

The question was attempted by most candidates. The question was in two parts: sub-
question (a) focused on Capital Reconstruction – realization account, sundry members
account and purchase consideration. This was not well answered by most candidates. The
bank account was not correctly accounted for by most candidates and therefore affected the
financial position computation.

Sub-question (b) which required candidates to explain the necessity in preparing

consolidated financial position statement was well answered by most candidates. Only a
few did not attempt sub-question (b).

Page 27 of 31
QUESTION FIVE
a)
Ratio Entity/Segment 2024 2023
(i) Operating profit Company 1,170+80 x 100 575+95 x 100
margin 6,300 5,100
=PBIT x 100 =19.84% =13.14%
Sales
PBT x 100 Company 1,170 x 100 575 x 100
Sales 6,300 5,100
=18.57% =11.27%
Renewable 590 x 100 180 x 100
Energy 2,100 1,200
Segment =28.09% =15%
Conventional 660 x 100 480 x 100
Energy 4,200 3,900
Segment =15.71% =12.31%
(ii) ROCE Company 1,250 x 100 670 x 100
=PBIT x 100 (8,565-1,300-50) (7,180-1,270-100)
CE =17.33% =11.53%
(iii) Inv. Turnover Company 3,940 3,500
(in times) = 1,845 1,346
COS =2.14 times =2.60 times
Inv.

(iv) Acid-test ratio Company 1,120+660 1080+754

=CA – Inventory 1,300+50 1,270+100
Current liabilities =1.32:1 =1.34:1
(v) Debt/equity Company 1,550 x 100 1,140
=Debt x 100 1,500+2,760+225 1,500+2020
Equity = 34.58% =32.39%

(7 marks)

Page 28 of 31
b)
To: The Credit Team
From: Financial consultant
Date: 1 November 2024
Subject: Evaluation of the performance (including nonfinancial) and position of
Krapa Energies PLC

Introduction
This report provides an assessment of financial and sustainability performance and
financial position of Krapa Energies PLC for the year ended 31 October 2024, relative to
its comparative year. The analysis covers profitability, liquidity, efficiency, gearing, and
sustainability. The report should be read along with the attached appendix.

Profitability
Profitability analysis involves evaluating a firm’s performance to determine how
effectively it generates profit relative to its revenue, assets, equity and other financial
metrics. Two main measures of performance are used to assess Krapa’s profitability.
Krapa’s revenues increased by 24.5% (1,200/5,300 x 100) in 2024 over 2023, driven by
sales growth in both segments especially the Renewable energy. The rise in revenues was
accompanied by improved operating margins. Krapa earned about 20 pesewas in 2024 on
each cedi of revenue made as against approximately 13 pesewas earned in 2023. The
implication is that there has been marked improvement in how well Krapa has managed its
operational costs. While the operating margins of both segments have also improved it is
apparently clear that the company-wide margin increase was more driven by Renewable
Energy Segment. In both years, Renewables’ margins, unlike Conventional margins, were
higher than those of the company-level figures. Bearing in mind the government’s plan of
limiting non-renewable operations over the next four years, it appears so refreshing that the
source of the entity’s improved performance emanated from the Renewables. Similar to the
operating margins, ROCE saw a significant improvement over the two years. Krapa
generated 17.33% returns in 2024 as against 11.53% in 2023 on the capital invested by
equity and long-debt holders. This suggests that Krapa experienced improvement in how
efficient it used its resources (net of short-term liabilities) to generate profit. Overall,
Krapa’s profitability was better in 2024 than in 2023.

Liquidity
Liquidity ratios are metrics used to evaluate a company’s ability to pay off its short-term
obligations using its near-term resources. To assess Krapa’s liquidity, acid-test ratio has
been used. Acid-test ratio is a measure of whether the company can cover its liabilities
without relying on the sale of inventories. While this ratio decreased from 1.34 in 2023 to
1.32 in 2024, Krapa witnessed a substantial improvement in being positioned to use current
assets without considering inventories to cover its current liabilities. By removing
inventories from the numerator, the acid-test ratio provides a stringent measure of liquidity.
The ratio of 1.32 provides much liquidity comfort as the company could meet all its
pressing liabilities and still have to spare 32 pesewas on every GH¢1 of short-term debt
owed.

Page 29 of 31
 Efficiency
Efficiency measures help to assess how effectively a company utilizes its assets and manage
its operations. The available metric here is the inventory turnover. Inventory turnover
provides a measure of how quick a company takes to convert inventory into sales. Krapa
inventory turnover has decreased over the two years. The company could turn inventory
into sales 2.6 times in 2024 as against the 2.14 times in 2023. The reduced turnover level
makes it plausible to now confirm that the significant improvement in profitability was
more likely driven by better cost control. The deterioration may also signify that some of
the items have become slow-moving or obsolete.

Gearing
Gearing ratios provide an indication about how much financial risk a company faces by
relating debt to equity capital. Although Krapa’s debt-to-equity ratio has increased, the new
ratio still falls comfortably below 50%. Thus, there has been an uplift in exposure to
financial risk but the current gearing position does not raise much concern as the company
still heavily relies on equity to finance its operations.

Conclusion
To sum up the analysis so far carried out, it appears Krapa could be a good candidate to
consider for the credit facility. The improvement in Krapa profitability and liquidity far
outweighs the loose deterioration in its inventory turnover and gearing over the same
period. Krapa has a good future and appears safe to be granted the three-year credit.
(8 marks)

c) Descriptive analytics summarizes historical data to provide insights into what has already
happened. It focuses on describing past events and trends, often using techniques like
calculating averages, percentages and frequencies. This helps businesses understand past
performance and identify patterns, but it doesn't predict the future or prescribe actions.
For example, a retailer might analyze sales data to determine the most popular products,
the peak sales periods (e.g., holiday season), and the average purchase value. This
information can then be used to optimize inventory, marketing campaigns, and staffing
levels.

Predictive analytics uses historical data and statistical algorithms to forecast future
outcomes. It helps businesses make informed decisions by identifying trends and patterns
that indicate what might happen next. This allows for proactive strategies to manage risk,
optimize operations, and improve customer experiences.
For example, financial institutions use predictive models to identify fraudulent
transactions by analyzing spending patterns and identifying anomalies.

Prescriptive analytics is a type of advanced analytics that recommends specific actions to

optimize outcomes based on data analysis. It goes beyond simply identifying what has
happened (descriptive) or predicting what might happen (predictive) by actively suggesting
the best course of action to take.
For example, retailers can use prescriptive analytics to adjust prices in real-time based
on demand, competition, and other factors, maximizing revenue and profit.
(5 marks)

(Total: 20 marks)

Page 30 of 31
EXAMINER’S COMMENTS
The question had two parts. The first part required students to compute relevant ratios for
two years. The second part required students to prepare a memo analysing the company’s
profitability, liquidity, efficiency and gearing based on given ratios. The question was a
standard question and generally straightforward.

The question, however, required some segmental analysis. Some candidates were not able
to compute the denominator of capital employed and PBIT, which were not directly given.
Some candidates were confused with the inventory turnover formula as they stated the
reverse, while some used revenue in place of cost of sales. Computing current liability was
a challenge to some candidates as a result of the government grant. Even though there was
a footnote to that effect, some found it difficult to separate the grant into current and non-
current. This affected the computation of the capital employed also.

Some candidates also failed to add the non-controlling interest (NCI) figure in deriving the
equity of the firm and this affected their Debt/Equity ratio. A few candidates scored below
half of the allotted marks, indicating possible challenges in understanding how to structure
their analysis or perform intertemporal analysis.

The second part of the question on descriptive, predictive and prescriptive analytics was
well answered by majority of the students.

CONCLUSION

As indicated earlier, overall, candidates did not perform better than the previous diet. The
results provide some indication of ill preparation and lack of appreciation of accounting
standards.

Page 31 of 31