The Assessment Task
Case study – Annual financial statement of a UK-based company – Unilever Plc
https://www.unilever.co.uk/
You are required to Produce a report (2000 words) to advise on the financial statements of the above-mentioned company that covers the following:
- A discussion and detailed analysis of how the financial statements demonstrate compliance to IFRSs, please provide specific examples from within the financial statements. At least 3 examples of IFRSs are 30% – LO A
- Using financial analytical tools and techniques provide a detailed commentary on the company’s financial performance and financial health in comparison to the previous year. 30% 10 ratios minimum should be used and the 5 types of ratios should be covered – LO B
- IAS 38 Intangible Assets defines the difference between research expenditure and development IAS 38 also lays down rules which must be applied to the capitalisation of research and development expenditure.
- Explain the meaning of the terms research expenditure and development expenditure.
- Explain the criteria applied to research and development expenditure, according to IAS 38, to determine whether the cost should be capitalised.
- Discuss briefly why there was a need for an accounting standard relating to research and development expenditure. 20% – LO C
- Considering the Conceptual Framework for Financial Reporting:
- Describe in broad terms common ways in which management can manipulate financial statements to indulge in ‘creative accounting’ and why they would wish to do so.
- Explain, with relevant examples, what is generally meant by the term ‘creative accounting’.
- Explain why it is important to record the substance rather than just the legal form of transactions and describe the features that may indicate that the substance of a transaction is different from its legal form. 10% – LO D