ACCT11059 USING ACCOUNTING FOR DECISION MAKING/ASSIGNMENT STAGE 2 (ASS#2): RESTATED FINANCIAL STATEMENTS
ACCT11059 USING ACCOUNTING FOR DECISION MAKING/ASSIGNMENT STAGE 2 (ASS#2): RESTATED FINANCIAL STATEMENTSStep 1 involves you writing down some of your ideas, reflections and reactions to reading
Chapter 4 ‘Analysing Financial Statements’ in the Study Guide
Read Chapter 4 (‘Analysing Financial Statements’) in the Study Guide.
Read it like you would a novel or any book, actively seeking to engage with the
author (me) and to understand what you are reading. What is the author trying to
say? Let the author take you on a journey: go with him and see what you think of
some of the key ideas and concepts being discussed.
And while you do this, note down key concepts that occur to you. That’s right; just
write them down as you go along. Also, include any questions that occur to you as
you are reading. What do you find confusing, difficult to understand or believe,
boring, exciting or surprising? Then include some of your key concepts and
questions (KCQs) in your Step 1.
Your personal engagement with the reading is what I am interested in. Do not
summarise the readings. I will say it again, do not summarise the readings. I am
interested in your reactions, developing understanding, and questions from the
readings. I know what the readings say, as I wrote them. So simply giving me a
summary of the readings will not be telling me anything I do not already know.
Use the words “I” and “me” in your ASS#2, Step 1. Different people will have
different reactions to the readings. Tell me what your reactions actually are. This is
what I am interested in. Do not tell me what you think I might want to hear. Be
genuine and honest in your reactions to the readings. Give me something of yourself
in your Step 1.
Please submit your Step 1 as a Word document.
Please allow 2 – 2 ½ hours to complete Step 1 (if you have English as your second
language, you may need to double this time).
Step 2: (18 marks)
Step 2 involves you restating your firm’s financial statements
Go to the ‘Restated Financial Statements’ tab in your firm’s spreadsheet. This is where
you will input your firm’s restated financial statements, once you have prepared them.
You will need to make sure you restate your firm’s financial statements for the most
recent four (4) years.
Restating your firm’s financial statements simply involves you reorganising the way your
firm’s financial statements are set out. ‘Restating’ financial statements can sometimes
refer to restating a firm’s financial statements after balance date to allow for changes that
occur after balance date. We are not talking about this type of ‘restating’ a firm’s
financial statements. Our task of restating our firm’s financial statements involves
moving around different items in a firm’s financial statements; and to do this we will
need to understand what each item is. This is the purpose for us in doing this: to help us
look carefully at each item in our firm’s financial statements and to develop some initial
understanding about what each item means to us.
Restate your firm’s financial statements based on material covered in Chapter 4 (Sections
4.2 & 4.3) in the Study Guide. You may see items in your firm’s financial statements
such as non-controlling interests; investments in associates; futures, options, hedges or
derivatives; deferred tax; or movements in foreign currency translation reserves. You
may wonder what these are and whether they relate to your firm’s operating or financial
activities. I encourage you to discuss with other students any issues you (and they) may
face in restating your firm’s financial statements. Also, participate in the discussion
forums and on Facebook with others in the course and comment on each other’s blogs.
Post on your blog your comments and responses to restating your firm’s financial
statements. How did you find this learning task? Did you find it frustrating, confusing or
enlightening? And what exactly do you feel you have learnt, or not learnt, about your
firm and its financial statements from restating its financial statements?
Restating the financial statements of a firm can be quite time consuming and, at times, a
little frustrating, especially when you do it for the first time. Indeed, you may feel this
may be quite an understatement when you are in the middle of restating your firm’s
However, ‘all’ you will be doing when restating your firm’s financial statements will be
moving around the various items in your firm’s financial statements, for example moving
your firm’s assets from current assets and non-current assets to operating assets and
financial assets. Still all the same items; just thoughtfully put under different headings.
Restating your firm’s financial statements will support you to look at each item in your
firm’s financial statements. Most people usually find it to be an interesting and
challenging learning task.
Include in your assignment (as a separate Word document) a brief commentary on
any issues or concerns you had in restating your firm’s financial statements and the
results of your discussions with other students. Also submit (online) your firm’s
spreadsheet with your restated financial statements included.
Please allow about 12 – 13 hours to complete Step 2.
Step 3: (4 marks)
Step 3 involves you identifying three products or services of your firm and
estimating/guessing their selling price and variable cost. You will also comment on the
contribution margins you calculate as well as identify constraints and briefly comment on
them. Remember, do not spend too long on Step 3 (it is worth just 4 marks). If you have
trouble easily identifying three specific products or services of your firm, then quickly
make some assumptions about what specific products/services your firm might have. You
will also likely need to guess the selling price and variable cost of each product/service.
Try to make your assumptions reasonably realistic.
Identify three products or services of your firm. For each product or service of your firm,
estimate (or guess) their selling price and variable cost and then calculate their
contribution margin. See Section 6.4 in Chapter 6 of the Study Guide for guidance on
what are variable costs and contribution margins. You might also like to see Section 8.2
in Chapter 8 of the Study Guide.
Discuss why the contribution margins for each of your firm’s three products/services
might differ or be similar. Why might your firm produce a range of products/services
with different contribution margins? Why not only produce the product/service with the
highest contribution margin?
Many companies can face constraints on their capacity to produce products or services.
For example, for Ryman Healthcare one constraint might include being able to find and
purchase suitable sites for new retirement villages. As most people who go into
retirement villages go into villages within 10 kilometres of their previous home, Ryman
Healthcare needs to find large, level sites for retirement villages in suburban areas where
there are a significant number of older people.
Identify (or guess) one or more resource constraints your firm may face, and also perhaps
any market constraints you feel may impinge on your firm.
In what ways might these constraints be relevant when deciding whether or not (and how
much) of the three products or services of your firm that you have identified, your firm
should produce and sell?
Please submit your Step 3 as a Word document.
Please allow 2 hours to complete Step 3.
There are two exemplars for ASS#2 from previous students in the course available
in the Feedback box on the right hand side of Moodle. Check these out to give you
some ideas about how you could approach your ASS#2.
(Note: these previous students may have been asked to do five products/services in
their ASS#2 – this year, you only need to do three).
Step 4: (3 marks)
Step 4 involves you providing (and receiving) feedback to three other students in our
course on their draft ASS#2. If you wish, these can be the same students you provided
feedback to in ASS#1.
The main benefit of Step 4 is in giving quality and thoughtful feedback to others in our
course. The process of thinking about the feedback you give to others in will help you
greatly with your own assignment as you think about what the assignment requires and
how others have addressed these requirements for their own companies.
Prior to 5.00pm Friday 29 April (Week 7), please:
• post draft work of your ASS#2 on your blog; and
• provide a link to your blog on the Draft ASS#2 Feedback forum (which you
should already have done as part of your ASS#1) and post in the Draft ASS#2
Feedback forum a comment that your draft ASS#2 is ready for student feedback
and, if you wish, specific areas where you would particularly value feedback for
Prior to 5.00pm Thursday 5 May (Week 8), please ensure you have provided quality
feedback to the three students you have been asked to give feedback to.
Include the feedback you have given to the three students in the course in your ASS#2. If
you wish, you can include and/or comment on other feedback you may have provided
other people in our course on their ASS#2.
Also, comment in your ASS#2 whether or not you found feedback from other students
useful and why this was the case. You can include in your discussion both how useful (or
not) you found feedback from the other three students asked to provide you with
feedback and also any feedback you may have received from other students in the course
through your interactions with them f2f, on discussion forums, Facebook and through
Please allow 2 – 2 ½ hours to complete Step 4.
NOTE: For your ASS#2, please submit one (1) Word document (including your
Steps 1, 2, 3 and 4) and also an Excel file of your firm’s spreadsheet with
your restated financial statements included.
PEER FEEDBACK SHEET: ASS#2
Feedback To: .
Restated Statement of Changes in Equity
Commentary and discussion with others
(Note: You may wish to give some comments
on their Excel spreadsheet)
Identify three products/services
Estimate selling price, variable cost & CMs
Commentary – CMs
Constraints – identify and commentary
Note: Please use this sheet as a guide. There is no need to provide feedback on each step of ASS#2. For
example, the person may have little or no draft work completed for one or more of the steps prior to
asking for your feedback.
Grades will be allocated to Assignment Stage 2 (ASS#2) as follows:
Mark Your Mark
Key Concepts & Questions (KCQs) 5
Restated Statement of Changes in Equity 2
Restated Balance Sheet 5
Restated Income Statement 8
Commentary and discussion with others 3
Identify three products or services of your firm 1
Estimate selling price, variable cost & CM 1
Commentary – contribution margins 1
Constraints – identify & commentary 1
Individual feedback with other students 3
[eservglobal] This is an area where we can put documentation.
Restated Statements of Movements in Equity
Years ended [31 October]
2015 2014 2013 2012
$’000 $’000 $’000 $’000
Equity at begining of year 55,294.0 37,354.0 15,074.0 28,873.0
(Loss)/Profit for the year (32,374.0) 14,240.0 10,374.0 (15,589.0)
Other operating comprehansive income
Exchange differences arising on translation of foreign operations 4,297.0 (471.0) (4,475.0) 1,277.0
Other financial comprehensive income
Total comprehensive income (CI) (28,077.0) 13,769.0 5,899.0 (14,312.0)
Transactions with shareholders:
Issue of new shares 5,500.0 3,879.0 15,925.0 –
Payment of dividends – (146.0) – (111.0)
Equity settled payments 54.0 438.0 456.0 624.0
Total transactions with shareholders 5,554.0 4,171.0 16,381.0 513.0
Equity at end of year 32,771.0 55,294.0 37,354.0 15,074.0
This area is designed as a space to write notes to yourself. Hopefully this will save you the hassle of attempting to find the pen and paper that is somewhere in the bottom of your bag.
Restated Statements of Financial Position
as at [31 October]
2015 2014 2013 2012
$’000 $’000 $’000 $’000
Cash and equivalents 4,976.0 3,679.0 4,909.0 3,794.0 have you broken into OPERATING ASSET and FINANCIAL ASSET?
Trade, other receivables and work in progress 22,140.0 24,620.0 21,846.0 14,094.0
Inventories 66.0 173.0 74.0 158.0
Current tax assets 107.0 98.0 4,272.0 90.0
Other current assets 7,606.0 2,191.0 – 0.0
Assets classified as help for sale – – 7,754.0 –
Investment in associate 31,473.0 27,777.0 0.0 0.0
Property, plant and equipment 84.0 3.0 482.0 912.0 2016 2015 2014 2013
Deferred tax assets 976.0 1,701.0 10,325.0 6,005.0 Sales -7,008 -5,218 -4,683 -6,132
Goodwill – 3,568.0 3,523.0 5,878.0
Total operating assets (OA) 67,428.0 63,810.0 53,185.0 30,931.0 Percentage of cash out of total sales -71% -71% -105% -62%
Operating Liabilities Cash and cash equivalents 4,976 3,679 4,909 3,794
Trade and other payables 19,619.0 10,719.0 8,678.0 7,816.0
Current tax payables 235.0 2,023.0 150.0 69.0 Operating cash -70.08 -52.18 -46.83 -61.32
Provisions 2,323.0 2,039.0 2,014.0 2,155.0 Financial cash 5,046 3,731 4,956 3,855
Deferred Revenue 1,286.0 1,117.0 1,989.0 2,125.0
Total operating liabilities (OL) 23,463.0 15,898.0 12,831.0 12,165.0
Net operting assets (NOA) 43,965.0 47,912.0 40,354.0 18,766.0
Borrowings 19,531.0 3,000.0 3,000.0 7,200.0
Other financial liabilities 2,058.0 0.0 0.0 0.0
Total financial obligations 21,589.0 3,000.0 3,000.0 7,200.0
Other intangible assets – capitalised software development 6,939.0 5,443.0 0.0 3,508.0 reconsider these. Is this in the correct position?
Other non-current assets or receivables 3,456.0 4,939.0 0.0 0.0 reconsider these. Is this in the correct position?
Total financial assets (FA) 10,395.0 10,382.0 0.0 3,508.0
Net Financial Obligations (NFO) 11,194.0 (7,382.0) 3,000.0 3,692.0
Issued capital 116,074.0 110,574.0 106,695.0 90,770.0
Reserves 174.0 (4,155.0) (4,090.0) (82.0)
Accumulated Losses (83,889.0) (51,349.0) (65,451.0) (75,699.0)
Parent entity interest 32,359.0 55,070.0 37,154.0 14,989.0
Non-controlling interest 412.0 224.0 200.0 85.0
Total Equity 32,771.0 55,294.0 37,354.0 15,074.0
Total NFO + Equity 43,965.0 47,912.0 40,354.0 18,766.0
Restated Statements of Financial Performance
Years ended [31 October]
2015 2014 2013 2012
$’000 $’000 $’000 $’000
Revenue 25,866.0 31,261.0 31,003.0 28,070.0
Impairment of goodwill (4,002.0) – – – reconsider these. Is this in the correct position?
Total operating revenue 21,864.0 31,261.0 31,003.0 28,070.0
Share of loss of associate (3,831.0) (2,275.0) – – reconsider these. Is this in the correct position?
Total operating income 18,033.0 (2,275.0) 0.0 0.0 this formula is incorrect. I have fixed cell J88 and you will need to fix the other cells
Research and development expenses (931.0) (2,151.0) (2,717.0) (2,289.0)
Sales and marketing expenses (7,008.0) (5,218.0) (4,683.0) (6,132.0)
Administration expenses (18,522.0) (10,900.0) (12,614.0) (13,040.0)
Amortisation expense (1,883.0) – (1,875.0) (4,704.0)
Depreciation expense (137.0) (584.0) (468.0) (637.0)
Total operating expense (28,481.0) (18,853.0) (22,357.0) (26,802.0)
Operating profit before income tax (10,448.0) (21,128.0) (22,357.0) (26,802.0)
Tax reported (2,125.0) (13,515.0) (5,879.0) (187.0)
Tax benefit* 406.8 76.2 132.3 421.5
Tax expense (1,718.2) (13,438.8) (5,746.7) 234.5
Other operating comprehensive income
Exchange differences arising on the translation of foreign operations (nil tax impact) 4,297.0 (471.0) (4,475.0) 1,277.0
Total other operating comprehensive income 4,297.0 (471.0) (4,475.0) 1,277.0
Comprehensive operating income after tax (OI) (7,869.2) (35,037.8) (32,578.7) (25,290.5)
Net financial expenses (NFE)
Financial expenses (FE) (1,356.0) (254.0) (441.0) (1,405.0)
Financial income ( FI) 0.0 0.0 0.0 0.0
Net financial expenses before tax (1,356.0) (254.0) (441.0) (1,405.0)
Tax benefit* (406.8) (76.2) (132.3) (421.5) this calculation has an error in it.
Other financial comprehensive income 0.0 0.0 0.0 0.0
Net financial expenses after tax (NFE) (1,762.8) (330.2) (573.3) (1,826.5)
Comprehensive net profit after tax (CI) (9,632.0) (35,368.0) (33,152.0) (27,117.0) The numbers here should equal line 13 up on the Statement of Changes in Equity
COST OF SALES IS MISSING?? (20,608.0) these two accounts and their corresponding numbers are missing from the above. Where should they be put??
Other gains and losses 2,163.0 these two accounts and their corresponding numbers are missing from the above. Where should they be put??
This is a place where you can copy and paste formulas, play with calculations and generally have fun whilst being able to see the data you are currently working on.