CACN012: Noncurrent liabilities QUESTION FSA-001 John Gander has recently inherited shares in Kingfisher Limited, a listed company. As this is his first experience of the Johannesburg Securities Exchange, he has approached you as his accountant to help interpret the following information relating to Kingfisher Limited which he obtained from an investment magazine published quarterly: Years ended 31 December: 2017 2018 2019 60 000 000 69 000 000 90 000 000 Sales in rands Profits before tax in rands 2.000 000 3 000 000 6000 000 Taxation in rands 400 000 600 000 1600 000 Earnings per share in cents Sc 6c 10c Net assets per share in cents 1.2c 1,2c 0.9c Dividends per share 1.Ac 2.1c 2.8c Price-carnings ratio 12 15 18 YOU ARE REQUIRED TO: (a) Prepare a memorandum for Gander discussing possible reasons for the trends between (i) Income before tax and earnings per share (ii) Earnings per share and dividends per share (iii) Earnings per share and net assets per share (iv) Earnings per share and P/E ratio [12 marks] (b) Identify and explain the benefits and shortcomings to investors of financial statements prepared in accordance with the international financial reporting standards [8 marks]