海南省2020年ACCA国际会计师报考指南

正确答案：
(c) Rights issue price = 2·45 x 0·8 = ￡1·96
Theoretical ex rights price = ((2 x 2·45) + (1 x 1·96))/3 = 6·86/3 = ￡2·29
New shares issued = 20m x 1/2 = 10 million
Funds raised = 1·96 x 10m = ￡19·6 million
After issue costs of ￡300,000 funds raised will be ￡19·3 million
Annual after-tax return generated by these funds = 19·3 x 0·09 = ￡1,737,000
New earnings of Merton plc = 1,737,000 + 4,500,000 = ￡6,237,000
New number of shares = 20m + 10m = 30 million
New earnings per share = 100 x 6,237,000/30,000,000 = 20·79 pence
New share price = 20·79 x 12 = ￡2·49
The weaknesses in this estimate are that the predicted return on investment of 9% may or may not be achieved: the priceearnings
ratio depends on the post investment share price, rather than the post investment share price depending on the
price-earnings ratio; the current earnings seem to be declining and this share price estimate assumes they remain constant;
in fact current earnings are likely to decline because the overdraft and annual interest are increasing but operating profit is
falling.
Expected gearing = 38/(60 + 19·3) = 47·9% compared to current gearing of 63%.
Including the overdraft, expected gearing = 46/(60 + 19·3) = 58% compared to 77%.
The gearing is predictably lower, but if the overdraft is included in the calculation the gearing of the company is still higher
than the sector average. The positive effect on financial risk could have a positive effect on the company’s share price, but
this is by no means certain.

正确答案：
(b) Tiltman Co
Tiltman’s total assets at 31 March 2006 represent 29% (16·1/55·2 × 100) of Johnston’s total assets. The subsidiary is
therefore material to Johnston’s consolidated financial statements.
Tutorial note: Tiltman’s profit for the year is not relevant as the acquisition took place just before the year end and will
therefore have no impact on the consolidated income statement. Calculations of the effect on consolidated profit before
taxation are therefore inappropriate and will not be awarded marks.
(i) Inventory overvaluation
This should have been written off to the income statement in the year to 31 March 2005 and not spread over three
years (contrary to IAS 2 ‘Inventories’).
At 31 March 2006 inventory is overvalued by $0·9m. This represents all Tiltmans’s profit for the year and 5·6% of
total assets and is material. At 31 March 2005 inventory was materially overvalued by $1·8m ($1·7m reported profit
should have been a $0·1m loss).
Tutorial note: 1/3 of the overvaluation was written off in the prior period (i.e. year to 31 March 2005) instead of $2·7m.
That the prior period’s auditor’s report was unmodified means that the previous auditor concurred with an incorrect
accounting treatment (or otherwise gave an inappropriate audit opinion).
As the matter is material a prior period adjustment is required (IAS 8 ‘Accounting Policies, Changes in Accounting
Estimates and Errors’). $1·8m should be written off against opening reserves (i.e. restated as at 1 April 2005).
(ii) Restructuring provision
$2·3m expense has been charged to Tiltman’s profit and loss in arriving at a draft profit of $0·7m. This is very material.
(The provision represents 14·3% of Tiltman’s total assets and is material to the balance sheet date also.)
The provision for redundancies and onerous contracts should not have been made for the year ended 31 March 2006
unless there was a constructive obligation at the balance sheet date (IAS 37 ‘Provisions, Contingent Liabilities and
Contingent Assets’). So, unless the main features of the restructuring plan had been announced to those affected (i.e.
redundancy notifications issued to employees), the provision should be reversed. However, it should then be disclosed
as a non-adjusting post balance sheet event (IAS 10 ‘Events After the Balance Sheet Date’).
Given the short time (less than one month) between acquisition and the balance sheet it is very possible that a
constructive obligation does not arise at the balance sheet date. The relocation in May was only part of a restructuring
(and could be the first evidence that Johnston’s management has started to implement a restructuring plan).
There is a risk that goodwill on consolidation of Tiltman may be overstated in Johnston’s consolidated financial
statements. To avoid the $2·3 expense having a significant effect on post-acquisition profit (which may be negligible
due to the short time between acquisition and year end), Johnston may have recognised it as a liability in the
determination of goodwill on acquisition.
However, the execution of Tiltman’s restructuring plan, though made for the year ended 31 March 2006, was conditional
upon its acquisition by Johnston. It does not therefore represent, immediately before the business combination, a
present obligation of Johnston. Nor is it a contingent liability of Johnston immediately before the combination. Therefore
Johnston cannot recognise a liability for Tiltman’s restructuring plans as part of allocating the cost of the combination
(IFRS 3 ‘Business Combinations’).
Tiltman’s auditor’s report
The following adjustments are required to the financial statements:
■ restructuring provision, $2·3m, eliminated;
■ adequate disclosure of relocation as a non-adjusting post balance sheet event;
■ current period inventory written down by $0·9m;
■ prior period inventory (and reserves) written down by $1·8m.
Profit for the year to 31 March 2006 should be $3·9m ($0·7 + $0·9 + $2·3).
If all these adjustments are made the auditor’s report should be unmodified. Otherwise, the auditor’s report should be
qualified ‘except for’ on grounds of disagreement. If none of the adjustments are made, the qualification should still be
‘except for’ as the matters are not pervasive.
Johnston’s auditor’s report
If Tiltman’s auditor’s report is unmodified (because the required adjustments are made) the auditor’s report of Johnston
should be similarly unmodified. As Tiltman is wholly-owned by Johnston there should be no problem getting the
adjustments made.
If no adjustments were made in Tiltman’s financial statements, adjustments could be made on consolidation, if
necessary, to avoid modification of the auditor’s report on Johnston’s financial statements.
The effect of these adjustments on Tiltman’s net assets is an increase of $1·4m. Goodwill arising on consolidation (if
any) would be reduced by $1·4m. The reduction in consolidated total assets required ($0·9m + $1·4m) is therefore
the same as the reduction in consolidated total liabilities (i.e. $2·3m). $2·3m is material (4·2% consolidated total
assets). If Tiltman’s financial statements are not adjusted and no adjustments are made on consolidation, the
consolidated financial position (balance sheet) should be qualified ‘except for’. The results of operations (i.e. profit for
the period) should be unqualified (if permitted in the jurisdiction in which Johnston reports).
Adjustment in respect of the inventory valuation may not be required as Johnston should have consolidated inventory
at fair value on acquisition. In this case, consolidated total liabilities should be reduced by $2·3m and goodwill arising
on consolidation (if any) reduced by $2·3m.
Tutorial note: The effect of any possible goodwill impairment has been ignored as the subsidiary has only just been
acquired and the balance sheet date is very close to the date of acquisition.

正确答案：

(c) The net present value of the West project is dependent upon the level of environmental expenditure that will be incurred by
Division IOA at the conclusion of the project. The potential NPV of the West project can be calculated using a discount rate
of 12% per annum which assumes that the West project has similar characteristics to the North, East and South projects.
Net cash inflows for each of years 1–4 = ￡5 million
Cumulative discount factor at 12% per annum = 3·037
Therefore the present value of cashflows is ￡5 million x 3·037 = ￡15,185 million and the net cash flow after the initial
outlay of ￡12 million is ￡3,185,000.
There is now the strategic consideration regarding whether to spend ￡2 million which will restore the river to its original colour
and also clear 90% of the pollution caused as a result of the mining activities of the IOA Division, or to incur expenditure of
a further ￡2 million which will completely redress any damage done to the environment by the activities of the IOA Division.