34 Reporting Results

Question 1

Accounting Concepts [11]

Answer 1

M - Money measurement: only
      things that can be measured 
      objectively in money terms
      So no brand names or talent
C - Cost: price paid less
      depreciation 
M - Matching: income & expenses
       relating to each other delt
       the same
M - Materiality: little point in
       stating info with no real 
       effect on picture 
C - Consistency: comparable 
      from year to year
B - Business entity: affairs of
      business kept separate from
      those of owners 
R - Realisation: income recognised
      when earned not received 
A - Accruals: cost recognised 
      when incurred not paid 
D - Dual aspect: any transaction
      affects two figures 
P - Prudence: lowest reasonable
      figure for income & A 
      highest reasonable figure for
      expenses & L
G - Going concern: assume 
      business will continue
      operations for foreseeable
      future

Question 2

Types of reports accompanying accounts [3]

Answer 2

¹ Chairperson & CEO statement:
     - optimistic: the success, 
       progress to objectives,
       management changes
² Investment report: 
     - investment strategy &
       performance 
³ Strategic report:
     - progress to long & short term
       strategy objectives 
⁴ Risk report: 
     - attitude to risk, key risks face
       risk management approach 
⁵ Remuneration report:
     - director pay, board attendance 
       turnover of directors 
⁶ Corporate governance report:  
     - how board made up & 
       how board independent 
⁷ Audit report

Question 3

Why & What & When should a Benefit Scheme disclose [5]

Answer 3

WHY:

• transparency
• alerting of problems
• offer members chance to leave

WHAT:

• benefit entitlement
• contribution obligations
• expense charges
• investment strategy
• risk involved
• treatment in event of insolvency

WHEN:

• on entery
• at regular intervals
• once payment commence
• on request
• a combination of these