QUESTION ONE On page 18 of the Reference Document, it is stated that GGBL has adopted International Financial Reporting Standards [IFRS) issued by the International Accounting Standards Board (IASB) Historically financial reporting throughout the world has differed widely. The IFRS Foundation (formerly the International Accounting Standards Committee Foundation (IASCF)) is committed to developing, in the public interest, a single set of high quality, understandable and enforceable global accounting Standards that require transparent and comparable information in general purpose financial statements. The various pronouncements of the IFRS Foundation are sometimes collectively referred to as International Financial Reporting Standards (IFRS). Required Describe the IFRS Foundation's standard setting process including how standards are produced, enforced and occasionally supplemented. Comment on whether you feel the move to date towards global accounting standards has been successful. (12 marks) b) Discuss the qualitative characteristics of financial information which the Directors of GGBL considered in determining the nature, content and presentation of the financial statements for 2019 (8 marks) (Total = 20 marks) QUESTION TWO In the notes to the financial statements (pages 18-52), it is stated that the Company adopted IFRS 9 and IFRS 15 for the first time in 2019. Further notes have been given with respect to recognition of revenue, recognition of financial assets and financial liabilities, subsequent measurement and classification of financial assets, impairment of financial assets and disclosures relating to financial instruments. Required i)Discuss the recognition criteria, classification and subsequent measurement of financial assets in accordance with IFRS 9 (6 marks) ii Discuss the procedure for revenue recognition in accordance with IFRS 15 (4 marks) b During the year ended 30 June 2019, GGBL spent a total of GHS 100,254,000 on capital work in progress (Refer to page 33 ). This expenditure was financed by a combination of equity capital and debt capital (together with capitalized borrowing costs). The debt capital financing was effected through a mix of two sets of borrow all includeum une borrowing figure ii Discuss the procedure for revenue recognition in accordance with IFRS 15 (4 marks) b During the year ended 30 June 2019, GGBL spent a total of GHS 100,254,000 on capital work in progress (Refer to page 33 ). This expenditure was financed by a combination of equity capital and debt capital (together with capitalized borrowing costs). The debt capital financing was effected through a mix of two sets of borrowing (all included in the borrowing figure presented on the statement of financial position on page The details of the debt capital that financed the CWIP are as follows: Loan ! 18% Debenture Stocks GHS20,000,000 Loan 2 15% Related Party Lending GHS 40,000,000 Both loans were outstanding from the beginning of the year and remained unsettled at the end of the year. The draw downs to partly finance the CWIP were as follows: I July 2018 GHS5,000,000 1 October 2018 GHSIO,000,000 1 April 2019 GHS15,000,000 Required Determine the amount of borrowing cost capitalized during the year (5 marks) c)The accounting policy relating to property, plant and equipment has been well discussed on pages 22 and 23. The policy covers recognition, depreciation, subsequent expenditure, impairment and de-recognition Required: Using the information contained in the financial statements and the accompanying notes, demonstrate your calculation of the depreciation charge for the year ended 30 June 2019 in an attempt to confirm or otherwise, the figure stated in the financial statements) (5 marks) Total = 20 marks Question 3 a) A common size financial statement displays items as a percentage of a common base figure, this type of financial statement allows for easy analysis between companies, or between periods, for the same company. Required Present the Statement of Profit or Loss and other comprehensive Income for the year and one 09 and the statement of common Question 3 a) A common size financial statement displays items as a percentage of base figure, this type of financial statement allows for easy analysis between companies, or between periods, for the same company. Required Present the Statement of Profit or Loss and other comprehensive Income for the year ended 30 June 2019 and the statement of financial position as at 30 June 2019 (and the comparatives for 2018) in the form of common size financial statements. (6 marks) b) Appraise the 2019 financial performance and financial position of Guinness Ghana Breweries Ltd (in comparison with the 2018 performance) with respect to profitability, efficiency, short term solvency (Liquidity). Long term financial stability (Gearing and shareholder worth maximization. (14 marks) Total = 20 marks The report should have as a minimum, a list of the following ratios as an appendix: Gross Profit margin Net Operating Profit Margin Return of Capital Employed Inventory Turnover Period Debt Collection Period Creditor Settlement period Current Ratio Quick Ratio Working capital cycle Debt Equity Ratio Interest Expense Cover Price Earning Ratio Dividend Yield Dividend pay-out Ratio Page 4 of 4 GUINNESS GHANA ANNUAL REPORT & FINANCIAL STATEMENTS Else Label OLD LAHES Red Label . Drink Responsibly of www.guinnessghana.com FRESH DOK! QUESTION ONE On page 18 of the Reference Document, it is stated that GGBL has adopted International Financial Reporting Standards [IFRS) issued by the International Accounting Standards Board (IASB) Historically financial reporting throughout the world has differed widely. The IFRS Foundation (formerly the International Accounting Standards Committee Foundation (IASCF)) is committed to developing, in the public interest, a single set of high quality, understandable and enforceable global accounting Standards that require transparent and comparable information in general purpose financial statements. The various pronouncements of the IFRS Foundation are sometimes collectively referred to as International Financial Reporting Standards (IFRS). Required Describe the IFRS Foundation's standard setting process including how standards are produced, enforced and occasionally supplemented. Comment on whether you feel the move to date towards global accounting standards has been successful. (12 marks) b) Discuss the qualitative characteristics of financial information which the Directors of GGBL considered in determining the nature, content and presentation of the financial statements for 2019 (8 marks) (Total = 20 marks) QUESTION TWO In the notes to the financial statements (pages 18-52), it is stated that the Company adopted IFRS 9 and IFRS 15 for the first time in 2019. Further notes have been given with respect to recognition of revenue, recognition of financial assets and financial liabilities, subsequent measurement and classification of financial assets, impairment of financial assets and disclosures relating to financial instruments. Required i)Discuss the recognition criteria, classification and subsequent measurement of financial assets in accordance with IFRS 9 (6 marks) ii Discuss the procedure for revenue recognition in accordance with IFRS 15 (4 marks) b During the year ended 30 June 2019, GGBL spent a total of GHS 100,254,000 on capital work in progress (Refer to page 33 ). This expenditure was financed by a combination of equity capital and debt capital (together with capitalized borrowing costs). The debt capital financing was effected through a mix of two sets of borrow all includeum une borrowing figure ii Discuss the procedure for revenue recognition in accordance with IFRS 15 (4 marks) b During the year ended 30 June 2019, GGBL spent a total of GHS 100,254,000 on capital work in progress (Refer to page 33 ). This expenditure was financed by a combination of equity capital and debt capital (together with capitalized borrowing costs). The debt capital financing was effected through a mix of two sets of borrowing (all included in the borrowing figure presented on the statement of financial position on page The details of the debt capital that financed the CWIP are as follows: Loan ! 18% Debenture Stocks GHS20,000,000 Loan 2 15% Related Party Lending GHS 40,000,000 Both loans were outstanding from the beginning of the year and remained unsettled at the end of the year. The draw downs to partly finance the CWIP were as follows: I July 2018 GHS5,000,000 1 October 2018 GHSIO,000,000 1 April 2019 GHS15,000,000 Required Determine the amount of borrowing cost capitalized during the year (5 marks) c)The accounting policy relating to property, plant and equipment has been well discussed on pages 22 and 23. The policy covers recognition, depreciation, subsequent expenditure, impairment and de-recognition Required: Using the information contained in the financial statements and the accompanying notes, demonstrate your calculation of the depreciation charge for the year ended 30 June 2019 in an attempt to confirm or otherwise, the figure stated in the financial statements) (5 marks) Total = 20 marks Question 3 a) A common size financial statement displays items as a percentage of a common base figure, this type of financial statement allows for easy analysis between companies, or between periods, for the same company. Required Present the Statement of Profit or Loss and other comprehensive Income for the year and one 09 and the statement of common Question 3 a) A common size financial statement displays items as a percentage of base figure, this type of financial statement allows for easy analysis between companies, or between periods, for the same company. Required Present the Statement of Profit or Loss and other comprehensive Income for the year ended 30 June 2019 and the statement of financial position as at 30 June 2019 (and the comparatives for 2018) in the form of common size financial statements. (6 marks) b) Appraise the 2019 financial performance and financial position of Guinness Ghana Breweries Ltd (in comparison with the 2018 performance) with respect to profitability, efficiency, short term solvency (Liquidity). Long term financial stability (Gearing and shareholder worth maximization. (14 marks) Total = 20 marks The report should have as a minimum, a list of the following ratios as an appendix: Gross Profit margin Net Operating Profit Margin Return of Capital Employed Inventory Turnover Period Debt Collection Period Creditor Settlement period Current Ratio Quick Ratio Working capital cycle Debt Equity Ratio Interest Expense Cover Price Earning Ratio Dividend Yield Dividend pay-out Ratio Page 4 of 4 GUINNESS GHANA ANNUAL REPORT & FINANCIAL STATEMENTS Else Label OLD LAHES Red Label . Drink Responsibly of www.guinnessghana.com FRESH DOK