Other

Question 1

List 3 advantages of alternative performance measures

Answer 1

1. Depreciation and amortisation - May distort figures as accounting estimate
2. Removing non recurring items - helps predict future performance
3. Excluding gains and losses - removes volatility on FV
   Depreciation differs if cost or Reval APM reflects management thought process

Question 2

What are the 6 capitals included in integrated reporting?

Answer 2

• Financial
• Intellectual
• Social and relationship
• Human
• Manufactured
• Natural

Question 3

List 6 things included in an integrated report

Answer 3

• organisational overview and external environment under which it operates
• Governance structure
• Business Model
• Risks and operations and how it affects entity’s ability to create value
• Strategy and resource allocation
• Performance and achievement of strategic objectives
• Outlook
• Basis of preparation

Question 4

What are the 4 steps recommended to be followed in the Practice Statement; making materiality judgements?

Answer 4

• Identify - consider users information needs
• Assess - is information material (qualitative and quantitative)
• Organise - classify and present information clearly and concisely
• Review - assess materiality on an individual and on a collective basis

Question 5

List 3 items covered under Elements or the Practice Statement; management commentary

Answer 5

• nature of business
• management objectives and strategies for meeting those objectives
• entity’s more significant resources, risks, relationships, results and prospects
• critical performance measures and indicators

Question 6

List 3 items covered under Principles; management commentary

Answer 6

• forward looking
• provide management view of entity’s performance, position and progress
• supplement and complement FS

Question 7

List 3 items covered under Presentation; management company

Answer 7

• Clear and straight forward
• focused on matters more important to entity
• consistent with disclosures

Question 8

What’s a common additional performance measure?

Answer 8

EBITA

Question 9

List 3 disadvantages of additional performance measures?

Answer 9

1. Not consistent year or year
2. Not audited
3. Non recurring items - highly subjective. Presenting entity in most favourable light

Question 10

What is the acronym for 6 capitals of integrated reporting?

Answer 10

FISHMN

Question 11

Biggest criticism of financial statements

Answer 11

Backward looking

Too much information

Question 12

What is a practice statement?

Answer 12

Recommended approach - have not enforced this.

More principals driven