Part 1: General guidance

You must work from the latest annual report and accounts for the group (please note, you must use the consolidated accounts for the group, and it must be a group that is listed in Europe, and reports using IFRS). If you work from an interim report, you would have incomplete information. You will need to draw on the information in the primary financial statements and the notes.

Read the management report (found in an annual report and accounts before the financial statements) and draw on that for your comments. You may also draw on any other information such as press releases / subsequent interim reports / comments in newspapers / news reports etc - I do not require you to do this additional research, but it may help you.

Read all the requirements fully, make sure you answer all sections, and try to avoid duplicating information.

I want to see that you have understood the principles of reporting covered in the course. Therefore your answers should focus on the areas of IFRS that we covered. You are not required to go into detail on other areas such as accounting for pensions / share-based payments (eg share option schemes for employees) / deferred tax or hedging. 

Your dossier should cover anywhere depending on how much spacing you use. In addition, you are required to present relevant extracts from the group accounts (eg income statement / balance sheet , notes etc ) in annexes.

You may put the calculations of ratios in the text or annex, as you prefer.

In general, the course slides will give you sufficient information to draw on, but if you require any further technical information about the standards, try https://www.iasplus.com/en

Part II: Structure of Dossier

The notes given below the headings in bold are for guidance, and to give you ideas but are not intended to be mandatory.

1) Description of the group

eg principal activities, geographic locations, size (eg revenue / market capitalisation / number of employees)

This information could be in the annual report and / or financial statements (eg look at segment disclosures).

2) Analysis of the group performance (profitability), using a minimum of 2 key ratios

eg comparison with prior years, explain what the ratios mean, comment on why they may have changed, consider drawing on the information in the management report to explain performance, also consider other comprehensive income (eg are there are any large (relative to net income) gains or losses?).

Consider whether the ratios have been affected by factors such as major acquisitions / foreign exchange fluctuations / other one-off items such as provisions / impairment charges etc. 

3) Analysis of the group’s liquidity and solvency positions, using a minimum of 2 key ratios

eg as above, comparison with prior years, explain what the ratios mean, comment on why they may have changed, consider drawing on the information in the management report.

Consider commenting on profitability trends / the extent to which earnings cover interest, and the extent to which the group is paying dividends to enrich your comments on solvency.

4) Comment on any of the following that may affect your analysis of the group performance: use of non-GAAP measures / EPS measures / unusual items.

Are there non-GAAP measures on the face of the income statement / or elsewhere in the financial statements, or management report or supporting information such as chairman or chief executive’s comments?

If the group has not used any non-GAAP measures as far as you can see, you might consider whether they might have been helpful to your analysis of performance. You can also comment on anything you find of interest in the income statement – perhaps the level of detail of the line items, or items you have not seen before.

5) Analysis of the group’s ability to generate cash from its operations sufficient to meet its needs (eg investments in fixed assets / servicing debt).

eg comparison with prior years, whether cash balances are increasing or decreasing / consider how fast the group can generate cash (eg consider how quickly inventory is sold and converted to cash). 

6) State what financial assets and liabilities the group has, and how they are measured (excluding cash).

Read the disclosures about key judgements and estimates in the financial statements – choose 2 items (2 judgements or 2 estimates or 1 of each) and explain their nature, using your own words, and why this information is useful for analysts.

Refer to the slides for session 4 to read about the requirements of IAS 1 for these disclosures; consider how the financial performance and / or position would be different from what was reported if a different judgement or estimate had been made.

You may find it easier to focus on areas we covered such as revenue recognition / useful lives / impairment of inventories / receivables or impairment of fixed assets.

8) Explain how the group accounts for either its revenue under IFRS 15 or internally generated intangible assets under IAS 38.

9) State whether the group buys and / or leases its tangible fixed assets and explain, if relevant, to what extent the application of IFRS 16, Leases, affected its financial statements.

If the group does not have material leases, you can simply explain how the application of IFRS 16 would have been affected its performance and position if some of the fixed assets had been leased.

10) Briefly explain, giving your reasons, whether you believe the Covid-19 pandemic will give rise to any accounting issues for the group for its next interim or full year results.

Where relevant, explain the nature of the accounting issues.

This is a useful link: https://www.esma.europa.eu/press-news/esma-news/esma-issues-new-qaalternative-performance-measures-in-context-covid-19