FAC3704/101/3/2016

Tutorial letter 101/3/2016 Group Financial Reporting

FAC3704 Semesters 1 and 2 Department of Financial Accounting

IMPORTANT INFORMATION:

Please activate your myUnisa profile and myLife email address and ensure you have regular access to the myUnisa module site FAC3704 as well as to your group site.

Note: This is an online module, and therefore your module is available on myUnisa. However, in order to support you in your learning process, you will also receive study material in printed format.

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CONTENTS

Page

1 INTRODUCTION .......................................................................................................................... 4

2 FORMAT OF FAC3704 ................................................................................................................ 4

2.1 Fully online ................................................................................................................................... 4

2.2 Printed materials ........................................................................................................................... 5

3 PURPOSE OF AND OUTCOMES FOR FAC3704 ........................................................................ 5

3.1 Purpose ........................................................................................................................................ 5

3.2 Outcomes ..................................................................................................................................... 6

4 LECTURERS AND CONTACT DETAILS ..................................................................................... 6

4.1 Lecturers ....................................................................................................................................... 6

4.2 Department ................................................................................................................................... 7

4.3 University ...................................................................................................................................... 8

5 RESOURCES FOR FAC3704 ...................................................................................................... 8

5.1 Prescribed books .......................................................................................................................... 8

5.2 Recommended books ................................................................................................................... 8

5.3 Electronic reserves (e-reserves) ................................................................................................... 8

6 STUDENT SUPPORT SERVICES FOR FAC3704 ....................................................................... 9

6.1 Tutor assistance ........................................................................................................................... 9

6.2 Contact with fellow students ........................................................................................................ 10

6.3 Unisa library services information ............................................................................................... 11

7 STUDY PLAN FOR FAC3704 .................................................................................................... 12

7.1 Study programme ....................................................................................................................... 12

7.2 Suggested study approach ......................................................................................................... 13

8 PRACTICAL WORK AND WORK-INTEGRATED LEARNING FOR FAC3704 .......................... 14

9 ASSESSMENT ........................................................................................................................... 14

9.1 Assessment plan ........................................................................................................................ 14

9.2 General assignment numbers ..................................................................................................... 16

9.3 Submission of assignments ........................................................................................................ 16

9.4 Importance of working through questions .................................................................................... 17

9.5 Plagiarism ................................................................................................................................... 17

10 OTHER ASSESSMENT METHODS ........................................................................................... 17

11 EXAMINATION ........................................................................................................................... 17

11.1 Examination admission ............................................................................................................... 17

11.2 Examination period ..................................................................................................................... 18

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11.3 Previous examination papers ...................................................................................................... 18

11.4 Information on the examination ................................................................................................... 18

11.5 Calculator policy ......................................................................................................................... 18

12 FREQUENTLY ASKED QUESTIONS ........................................................................................ 18

13 SOURCES CONSULTED ........................................................................................................... 18

14 CONCLUSION ............................................................................................................................ 18

15 ANNEXURE ................................................................................................................................ 19

ANNEXURE A: COMPULSORY ASSIGNMENT 01 (MCQ) – FIRST SEMESTER ................................. 20

ANNEXURE B: COMPULSORY ASSIGNMENT 02 (WRITTEN) – FIRST SEMESTER ......................... 26

ANNEXURE C: COMPULSORY ASSIGNMENT 01 (MCQ) – SECOND SEMESTER ............................ 30

ANNEXURE D: COMPULSORY ASSIGNMENT 02 (WRITTEN) – SECOND SEMESTER .................... 35

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1 INTRODUCTION Dear Student We are pleased to welcome you to FAC3704 – Group Financial Reporting and trust that you will find it both interesting and rewarding. We will do our best to make your study of this module successful. You will be well on your way to success if you start studying early in the semester and resolve to do the assignments properly. You will receive a number of tutorial letters during the semester. A tutorial letter is our way of communicating with you about teaching, learning and assessment. This tutorial letter contains important information about the module, resources and assignments. We urge you to read it carefully and to keep it at hand when working through the study material, preparing the assignments, preparing for the examination and addressing questions to your lecturers. In this tutorial letter 101, you will find the compulsory assignments as well as instructions on the preparation and submission of the compulsory assignments. It also provides all the information you need with regard to the prescribed study material and other resources and how to obtain them. Please read through this information carefully and make sure that you obtain the prescribed material as soon as possible. It is very important that you read all the tutorial letters you receive during the semester immediately and carefully, as they always contain important information. Please note:

This is an online module, and therefore your module is available on myUnisa. However, in order to support you in your learning process, you will also receive study materials in printed format.

All study material on the internet can be accessed via the UNISA website, after registering as a myUnisa user. Once you have registered as a myUnisa user, access can be obtained as follows: 1. Enter your student number and password. 2. Select the relevant course code (FAC3704). 3. Access study material as required. We trust that you will enjoy this module and wish you all the best with you studies! 2 FORMAT OF FAC3704 2.1 Fully online

Please note that this module is offered fully online. All study material for this module will be available on myUnisa. It is thus very important that you register on myUnisa and access the module site on a regular basis. You must be registered on myUnisa to be able to access your learning material, submit your assignments, gain access to various learning resources, “chat” to your lecturer and fellow students about your studies and the challenges that you might encounter and to participate in online discussion forums. Importantly, myUnisa contains the Learning Units tool from which you will only be able to access the study material for this module if you have registered and have access to myUnisa.

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2.2 Printed materials

We want you to be successful in this online module, thus we also provide you with some of the study material in printed format. This will allow you to read the study material, even if you are not online.

In addition to this tutorial letter you will receive printed copies of the online tutorial matter from myUnisa. While these printed materials may appear slightly different from the online study materials, they are exactly the same and have been duplicated from the online myUnisa website.

The printed support materials are a back-up of everything that is found online, on myUnisa. In other words, you should NOT wait for the printed support materials to arrive to start studying. The online material can be used to start with your studies if you have not yet received your printed copies.

Please consult the publication myStudies@Unisa for more information on the activation of your myLife email address as well as obtaining access to the myUnisa module site. You will receive the following tutorial letters for this module (which will also be available online):

Tutorial letter Content MO 001 Learning Units (This will be the study guide for this module)

101 Important information including compulsory assignments 102 Questions and suggested solutions 103 Integrated questions and suggested solutions 201 Suggested solution to compulsory assignment 01 202 Suggested solution to compulsory assignment 02

PLEASE NOTE: If any additional tutorial letters (other than those mentioned above) are posted to you, an announcement will be made via myUnisa to let you know that there are additional tutorial letters (other than those mentioned above) for this module. These tutorial letters will also be uploaded on myUnisa.

3 PURPOSE OF AND OUTCOMES FOR FAC3704 3.1 Purpose

To gain knowledge of and insight into, as well as the ability to apply this knowledge to the preparation of financial statements, (with specific reference to the requirements of the Companies Act (as relating to widely-held companies) and International Financial Reporting Standards (IFRS)) for the following subject matter: the consolidation procedures required for the preparation and presentation of group financial statements namely, business combinations, intragroup transactions, losses of a subsidiary, horizontal groups, vertical groups, complex groups, consolidated statements of cash flows, changes in ownership, and the accounting treatment and disclosure of associates and joint ventures and joint operations, including any relevant deferred tax implications.

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3.2 Outcomes

Specific Outcome 1 Learners should be able to prepare group financial statements as at the date of acquisition according to the requirements of International Financial Reporting Standards (IFRS). Specific Outcome 2 Learners should be able to prepare group financial statements after the date of acquisition according to the requirements of International Financial Reporting Standards (IFRS). Specific Outcome 3 Learners should be able to identify different group formats in order to apply the relevant consolidation procedures for the preparation of consolidated annual financial statements of a complex group according to the requirements of International Financial Reporting Standards (IFRS). Specific Outcome 4 Learners should be able to explain associates in terms of IAS 28 and apply consolidation procedures in order to prepare consolidated annual financial statements when a parent holds a direct or indirect interest in an associate and the results of the associate are accounted for according to the equity method. Specific Outcome 5 Learners should be able to explain joint operations and joint ventures in terms of IFRS 11 and prepare the annual financial statements for joint operations and joint ventures in terms of the requirements of International Financial Reporting Standards (IFRS). Specific Outcome 6 Learners should be able to apply consolidation procedures according to International Financial Reporting Standards (IFRS) in order to prepare the consolidated annual financial statements for a group where there has been a change in ownership. Specific Outcome 7 Learners should be able to prepare a consolidated statement of cash flows in terms of the requirements of International Financial Reporting Standards (IFRS). 4 LECTURERS AND CONTACT DETAILS 4.1 Lecturers

You may contact your lecturers by e-mail, telephone or on myUnisa.

Lecturers Office number Mrs LA Jordaan Mrs M Scott Mrs KP Siyila Mr J van Staden Secretary/Administration officer

AJH van der Walt building 2-56 AJH van der Walt building 2-59 AJH van der Walt building 2-56 AJH van der Walt building 2-53 AJH van der Walt building 2-05

Personal appointment Please make an appointment, in advance, with your lecturer should you wish to see them personally with specific problem areas in your studies. Lecturers are available from 07:45 to 16:00 on weekdays.

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Telephonic enquiries

You can contact your lecturers telephonically, by making use of the course contact number provided below. An available lecturer will take your call and assist you as promptly as they can.

(012) 429 4250

E-mail You can also communicate with the lecturers via e-mail. Please make use of the following e-mail address which is specific to the FAC3704 module to ensure a prompt reply:

It is essential that you include your name, student number and telephone number in all e-mails. Due to the high volumes of e-mails received by lecturers from students it is not always possible to reply to these e-mails immediately. Please be patient as your e-mails will be attended to as soon as possible. myUnisa You can also communicate with the lecturers via myUnisa. Online address: http://my.unisa.ac.za Postal Address Name of lecturer, Department of Financial Accounting University of South Africa P O Box 392 Unisa 0003

4.2 Department The contact numbers of the Department of Financial Accounting are as follows:

• Telephone: (012) 429 4459 (departmental secretary) • Fax: (012) 429 3335 (marked for a specific lecturer’s attention).

College Information Coordinators Jabulani Chauke: (012) 429 2982 Christine Tage: (012) 429 2233 E-mail: CASenquiries-Undergraduate@unisa.ac.za

College Information Hub Tel no: (012) 429 4211 The Department of Financial Accounting is situated on the main campus on the second floor of the AJH van der Walt Building.

Semester 1 and 2

FAC3704@unisa.ac.za

mailto:CASenquiries-Undergraduate@unisa.ac.za

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Ensure that your student number, return address and telephone numbers are included with your enquiries. Always have your student number at hand when contacting the University. 4.3 University You can contact Unisa as follows:

Unisa website (http://www.unisa.ac.za & http://mobi.unisa.ac.za)

All study-related information is now available on the new Unisa corporate website in both web and mobi formats.

myUnisa (https://my.unisa.ac.za/portal & https://my.unisa.ac.za/portal/pda)

Students can access their own information via the myUnisa website or mobi site.

Students can find general Unisa contact details in the myStudies@Unisa publication which is available on the Unisa website (http://www.unisa.ac.za) under the “STUDY” section. Always have your student number at hand when contacting the University. 5 RESOURCES FOR FAC3704 5.1 Prescribed books

The study materials as such are not exhaustive for purposes of tuition, and it is essential that you have at your disposal the following prescribed books:

Binnekade, CS, et al 2013. Group Statements. 15th ed. LexisNexis: Durban. Volume 1 and Volume 2. These books are referred to in the tutorial letters as Group Statements. Please refer to the list of official booksellers and their addresses in the myStudies@Unisa publication. Prescribed books can be obtained from the University’s official booksellers. Should you have any difficulties obtaining books from the official booksellers, please contact the Prescribed Book Section as soon as possible at telephone number (012) 429 4152 or e-mail vospresc@unisa.ac.za

STUDENTS ARE REQUIRED TO USE A NON-PROGRAMMABLE FINANCIAL CALCULATOR FOR THIS MODULE. REFER TO POINT 11.5 FOR ADDITIONAL INFORMATION.

5.2 Recommended books There are no recommended books for this module.

5.3 Electronic reserves (e-reserves) There are no electronic reserves for this module.

http://www.unisa.ac.za/http://mobi.unisa.ac.za/https://my.unisa.ac.za/portal/pdahttp://www.unisa.ac.za/mailto:vospresc@unisa.ac.za

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6 STUDENT SUPPORT SERVICES FOR FAC3704 Important information appears in your myStudies@Unisa publication.

6.1 Tutor assistance

A tutor is a qualified professional appointed by the university to assist and support students in their journey to the successful completion of their qualifications.

Effective tutor assistance helps you to: • take responsibility for your own learning; • develop analytical skills; • develop skills in teamwork and cooperative learning; and • develop listening, communication, presentation and debating skills.

Types of tutor assistance • Face-to-face tutoring • E-tutor support

6.1.1 Face-to-face tutor support

A face-to-face tutorial is an organised session where students and tutors meet regularly at a common venue and at scheduled times to discuss and solve problems with the contents of their study material e.g. principles, suggested solutions etc. A face-to-face tutorial has a number of advantages, namely: • It provides you with great opportunities to interact with your tutors and other students and get a

better understanding of the course content; • It encourages you to actively participate in the tutorial sessions; and • It helps you to build relationships with other students.

What is the role of learners in face-to-face tutorials? If students want to benefit from tutorials, they must participate effectively by meeting the following requirements: • prepare adequately for tutorials; • attend regularly and be punctual; • encourage fellow students to attend tutorials regularly; and • cooperate with tutors.

Where can I go to if I want to attend face to face tutorials? Tutorials are available at Unisa Regional Learning Centres throughout the country. Please visit the myUnisa website under “Additional Resources” for contact details of the centre nearest to you. You can contact the regional centre to find out if there are tutorials at that specific centre for this module.

How to join face-to-face tutorial:

• At the Unisa regional learning centre, a tutorial officer will help you to complete the Tutorial enrolment form.

• Tutorials take place weekday evenings and Saturday mornings – look for the tutorials of your modules on the timetable at the centre notice boards or on the Unisa regional website.

• You will be notified through SMS about the starting date of your tutorial sessions. • Tutorials are free of charge.

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6.1.2 E-tutor support

E-tutoring is an organised session where students and e-tutors interact regularly, online. The teaching and learning platform is myUnisa. Tools such as online discussion forums are used to facilitate teaching and learning.

E-tutoring has a number of advantages:

• The use of the myUnisa platform provides you with an opportunity to interact with your e- tutor and fellow students online, using the various tools available.

• Your e-tutor is accessible for longer periods compared to face-to-face tutors, each day of the week.

• It helps to develop technical skills required for an online environment.

You will be allocated an e-tutor for each module you have registered for, provided the module has e-tutoring. You will then be notified by sms about the details of your e-tutor as soon as you have been allocated one. Your e-tutor will contact you on your mylife e-mail with details of the tutorials. Most Unisa learning centres have computer lab facilities from where you can access myUnisa. Alternatively, you will need a device with internet connection, e.g. laptop, tablet/iPad, smartphone, etc.

A group of 200 students is linked to one e-tutor. Students in a group are able to interact and learn from one another. Each group has their own separate site on myUnisa. These sites are numbered and you will receive your group number by email and SMS. Don’t be confused! You will now have two sites for those modules with online tutoring, i.e. the main module site and the group module site.

In the main module site you will find the official study material files that you can download. You should also submit your assignments here. The primary lecturer of the module may from time to time communicate with the entire class through this site.

The group module site is where you can interact with your tutor and other group members. You can also participate in discussions, post academic-related queries and receive specific tutor support.

6.2 Contact with fellow students

6.2.1 Study groups

Many students have found that they benefit from joining a study group consisting of students that are enrolled for the same module(s). It is advisable to have contact with fellow students. One way to do this is to form study groups. The addresses of students in your area may be obtained from the following department:

Directorate: Student Administration and Registration PO Box 392 UNISA 0003

6.2.2 myUnisa

If you have access to a computer that is linked to the internet, you can quickly access resources and information at the university. The myUnisa learning management system is Unisa's online campus that will help you to communicate with your lecturers, with other students and with the administrative departments of Unisa – all through the computer and the internet.

To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and then click on the “Login to myUnisa” link on the right-hand side of the screen. This should take you to the myUnisa website. You can also go there directly by typing in http://my.unisa.ac.za.

Please consult the myStudies@Unisa publication, for more information on myUnisa.

http://www.unisa.ac.za/http://my.unisa.ac.za/

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6.2.3 Group discussions

Further communication regarding group discussions will follow in a tutorial letter or an announcement on myUnisa during the semester.

6.3 Unisa library services information

6.3.1 Unisa library login

You will be required to provide your login details, i.e. your student number and your myUnisa password, in order to access the library’s online resources and services. This will enable you to: • view or print your electronic course material; • request library material; • view and renew your library material; and • use the library’s e-resources

6.3.2 Requesting books from the library Students are expected to purchase their own copies of the prescribed books. A limited number of copies are housed in the Unisa Libraries, subject to each branch library’s lending regulations. Problems experienced in obtaining copies from booksellers should be directed to the Prescribed Book section at e-mail vospresc@unisa.ac.za or telephone +27 12 429 4152.

6.3.3 Electronic book requests

The preferred way of requesting prescribed or recommended books is online via the library’s catalogue. Go to:

http://oasis.unisa.ac.za, or via myUnisa, go to http://my.unisa.ac.za> Login > Library > Library catalogue, or for mobile access (AirPAC), go to http://oasis.unisa.ac.za/airpac. 6.3.4 Telephonic book requests

This can be done by dialing +27 12 429 3133. Please supply the reservation order number (RON).

6.3.5 Postal book requests

Books may also be requested by completing a library book request card for each book.

These should be mailed to:

The Head: Request Services Department of Library Services PO Box 392 Pretoria 0003

or faxed to +27 12 429 8128. Enquiries about requested books should be addressed to bib-circ@unisa.ac.za. Note that requests should not be sent to this email address.

Telephonic enquiries can be made at +27 12 429 3133/3134. An after-hour voicemail service is also available at these numbers.

mailto:vospresc@unisa.ac.zahttp://oasis.unisa.ac.za/http://my.unisa.ac.za/http://oasis.unisa.ac.za/airpacmailto:bib-circ@unisa.ac.za

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7 STUDY PLAN FOR FAC3704 7.1 Study programme

Use your myStudies@Unisa publication for general time management and planning skills. Experience has shown that students often fail to plan their studies properly so as to achieve specific study goals at predetermined dates. This leads to a haphazard approach to their studies and the use of ineffective study techniques. We assume the following:

Studies should commence in January (first semester) and July (second semester) and that the full module should be completed by approximately the end of April (first semester) and September (second semester). This will leave sufficient time for revision.

NB: Those of you who register late should endeavour to put in extra effort in order to make up the lost time.

The table that follows can be used as a guideline on how to plan your studies for FAC3704. SEMESTER 1

The following table is a suggested study programme for completing the syllabus of this module:

Week Learning unit: Week commences on: Assignment no: Due date:

1 1 Business combinations 25 January 2 1 Business combinations 1 February 3 2 Consolidations after the date of

acquisition 8 February

4 2 Consolidations after the date of acquisition

15 February

5 3 Complex groups 22 February

6 3 Complex groups and

4 Accounting for investments in associates (IAS 28) 29 February

7 4 Accounting for investments in associates (IAS 28)

7 March

8 5 Accounting for interests in joint arrangements 14 March

Compulsory 01

16 March

9 6 Changes in ownership 21 March 10 6 Changes in ownership 28 March

11 7 Consolidated statement of cash flows (IAS 7)

4 April

12 7 Consolidated statement of cash flows (IAS 7) 11 April

Compulsory 02

13 April 13 Revision of all learning units 18 April

14 Integrated questions 25 April

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SEMESTER 2 The following table is a suggested study programme for completing the syllabus of this module:

Week Learning unit: Week commences on: Assignment no: Due date:

1 1 Business combinations 4 July 2 1 Business combinations 11 July 3 2 Consolidations after the date of

acquisition 18 July

4 2 Consolidations after the date of acquisition

25 July

5 3 Complex groups 01 August

6 3 Complex groups and

4 Accounting for investments in associates (IAS 28) 8 August

7 4 Accounting for investments in associates (IAS 28)

15 August

Compulsory 01

15 August

8 5 Accounting for interests in joint arrangements 22 August

9 6 Changes in ownership 29 August 10 6 Changes in ownership 5 September Compulsory 02 8 September

11 7 Consolidated statement of cash flows (IAS 7)

12 September

12 7 Consolidated statement of cash flows (IAS 7) 19 September

13 Revision of all learning units 26 September 14 Integrated questions 3 October

Please do not fall behind with your study programme. Regaining of lost time is seldom achieved.

7.2 Suggested study approach

Firstly work through the relevant sections of tutorial letter MO 001 pertaining to the assignment to be attempted. Ensure that you understand the work and do the examples on your own, without looking at the answers. Compare your answer to the one in the learning unit and pinpoint where you made mistakes. Restudy the relevant section and ensure that you now understand the solution to the example. If you still do not understand, write the page reference and the problem on your “queries list” so that you can send an e-mail to your lecturers or phone them for an explanation. Only hereafter should you attempt answering the assignment questions under examination conditions.

The assignment must in effect constitute your first revision of the study material which you have studied. In other words, the assignment should not serve as a checklist of the work required to be studied for the completion of the assignment, but should, when the assignment is attempted, serve as a test of the knowledge that you have acquired by studying the work.

As the suggested solution for the assignments becomes available, compare your attempt to the solution and identify the differences. In respect of every error, determine why the error was made i.e. careless reading of the question, lack of knowledge, question not answered, carelessness in the answering of the question, unable to complete the question due to time, calculations not shown, etc. You have now

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revised the work for a second time and you have been exposed to the type of errors that you are prone to make and can therefore work on correcting them.

If you persevere with this proposed approach to studying this module, you will reap the benefit of sustained practice in answering questions and will enjoy success in the examination.

8 PRACTICAL WORK AND WORK-INTEGRATED LEARNING FOR FAC3704

There is no practical work for this module.

9 ASSESSMENT 9.1 Assessment plan

The Management of the University has taken a decision to introduce compulsory assignments to be submitted in all modules by set due dates. Submission of compulsory assignment 01 by its due date will give a student admission to the examination in the particular module and the marks obtained for both compulsory assignments 01 and 02 will contribute towards the final mark for that module.

Please note: Compulsory Assignment 01 and Compulsory Assignment 02 will contribute 20% towards your final mark. The assignment questions for the first and second semester are different and the assignments have different unique numbers.

A final mark of 50% is required to pass this module. This final mark is calculated as follows: (20% x mark obtained for both compulsory assignments) + (80% x mark obtained in the examination)

The 20% mark for both compulsory assignments in semester 1 and semester 2 is made up as follow:

• Compulsory Assignment 01 contribution – 5% out of the 20% • Compulsory Assignment 02 contribution – 15% out of the 20%

Example on how to calculate your year mark:

Assignment 01

mark/result

= A

Assignment 01

contribution of year mark A x 5%/20%

= A1

Assignment 02

mark/result

= B

Assignment 02

contribution of year mark B x 15%/20%

= B1

Assignments year mark A1 + B1

= C

Student 1 100% 25% 100% 75% 100% Student 2 49% 12% 77% 58% 70% Student 3 100% 25% 33% 25% 50% Student 4 28% 7% 30% 23% 30% Student 5 0% 0% 27% 20% 20% Student 6 10% 3% 9% 7% 10%

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Example on how to calculate your final mark:

Assignments year mark

(Refer to C as per table above)

= C

Contribution of assignments year

mark C x 20%

= D

Exam mark contribution

required to pass (50% minus

assignment mark contribution)

50% - D = E

Minimum exam mark required to

pass E/80% x 100%

= Exam mark

Student 1 100% 20% *32% *40% Student 2 70% 14% 36% 45% Student 3 50% 10% 40% 50% Student 4 30% 6% 44% 55% Student 5 20% 4% 46% 58% Student 6 10% 2% 48% 60%

*A subminimum of 40% for the exam is required and therefore your minimum contribution is 32%.

Calculation of final mark for FAC3704 per semester:

Form of assessment % Contribution to final mark Compulsory assignment 01/2016 – FIRST SEMESTER 5% Compulsory assignment 02/2016 – FIRST SEMESTER 15% Written examination for FIRST SEMESTER 80% Final mark for FAC3704 100%

Compulsory assignment 01/2016 – SECOND SEMESTER 5% Compulsory assignment 02/2016 – SECOND SEMESTER 15% Written examination for SECOND SEMESTER 80% Final mark for FAC3704 100% Please ensure that compulsory assignment 01 reaches the University before the due date - late submission of the assignment will result in you not being admitted to the examination. Please refer to section 9.2.2 of this tutorial letter for the respective due dates. Sub minimum requirements A sub minimum of 40% in the examination is required. Paragraph 5.4 of the Assessment Policy provides that the final mark of a student is a combination of the year mark and the examination mark, in the ratio as explained above. In case where a student does not obtain the required sub minimum of 40% in the examination, the year mark does not count. The final mark then is the examination mark obtained. Result of supplementary examination: In terms of paragraph 5.7 of the Assessment Policy, the year mark which was previously obtained (i.e the assignment marks obtained in the semester the student was initially registered), will contribute to the final mark of students writing supplementary examinations.

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9.2 General assignment numbers Assignments are numbered consecutively per module, starting from 01.

9.2.1 Unique assignment numbers Each assignment has its own unique assignment number. The following are the unique assignment numbers:

SEMESTER 1 SEMESTER 2 Assignment Type Unique number Assignment Type Unique number Assignment 1 MCQ 712575 Assignment 1 MCQ 848139 Assignment 2 Written 829357 Assignment 2 Written 779486

9.2.2 Due dates for assignments

Assignment number Unique number Due date Contribution towards

final mark Compulsory 01/2016 – FIRST SEMESTER 712575 16 March 2016 5% Compulsory 02/2016 – FIRST SEMESTER 829357 13 April 2016 15% Compulsory 01/2016 – SECOND SEMESTER 848139 15 August 2016 5% Compulsory 02/2016 – SECOND SEMESTER 779486 8 September 2016 15% 9.2.3 Finality of due dates

The receipt of assignments after the due date disrupts our marking programme and as the uncontrolled submission of assignments furthermore creates administrative problems no extension will be granted for the submission of assignments. All assignments submitted after the due date will not be marked and a mark of zero will be awarded to the assignment.

9.3 Submission of assignments

(a) Students may submit written assignments and MCQ assignments either electronically via myUnisa or by post. We strongly recommend that you submit your assignments electronically via myUnisa. Assignments may not be submitted by fax or e-mail.

(b) For detailed information on assignments please refer to the myStudies@Unisa publication. To submit an assignment via myUnisa:

• Go to myUnisa. • Log in with your student number and password. • Select the module. • Click on “Assignments” in the menu on the left-hand side of the screen. • Click on the assignment number you wish to submit. • Follow the instructions.

SUBMISSION OF ASSIGNMENT 01 IS COMPULSORY TO OBTAIN EXAMINATION ADMISSION. ASSIGNMENT 01 AND ASSIGNMENT 02 TOGETHER WILL COUNT 20% TOWARDS YOUR FINAL MARK FOR THIS MODULE.

IMPORTANT: IF THE COMPULSORY ASSIGNMENT 01 IS RECEIVED AFTER THE DUE DATE, YOU WILL NOT GET ADMISSION TO THE EXAMINATION.

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(c) Assignments received after the due date will not be marked. No exceptions in this regard will be made. It is your responsibility to ensure that the correct assignment is submitted in the correct format.

9.4 Importance of working through questions Assignments, self-assessment questions and additional questions form an integral part of the tutorial matter and must also be studied for examination purposes. It is in your own interest to complete both assignments and additional questions as: • it provides practice which is essential in your study of accounting; and • it contains valuable revision material.

Please note that it is not possible to cover every aspect of the tutorial matter in the assignments. 9.5 Plagiarism Plagiarism is the act of taking words, ideas and thoughts of others and passing them off as your own. It is a form of theft which involves a number of dishonest academic activities. The disciplinary code for students is given to all students at registration. Students are advised to study the code. Kindly read the University Policy on Copyright Infringement and Plagiarism as well. You are not allowed to copy another student’s assignment. The University will take stern actions against such students. We urge you once again to refrain from such malpractices. Although students may work together when preparing for assignments, each student must prepare and submit his or her own individual assignment. 10 OTHER ASSESSMENT METHODS No other assessment methods are currently used for this module. 11 EXAMINATION Use your myStudies@Unisa publication for general examination guidelines and examination preparation guidelines. It should be mentioned that you will write one examination paper for this module in May/June (first semester) or October/November (second semester). 11.1 Examination admission

PLEASE NOTE: It is important that you keep a copy of your submitted assignment as well as the submission reference number, to facilitate enquiries at a later date. All enquiries regarding assignments not marked or outstanding marks should be made at the latest one week BEFORE the examination.

SUBMISSION OF ASSIGNMENT 01 IS COMPULSORY TO OBTAIN EXAMINATION ADMISSION. ASSIGNMENT 01 AND ASSIGNMENT 02 TOGETHER WILL COUNT 20% TOWARDS YOUR FINAL MARK FOR THIS MODULE. ONLY STUDENTS THAT COMPLY WITH THIS REQUIREMENT WILL BE ADMITTED TO THE EXAMINATION OF FAC3704.

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Please note: The compulsory assignments (assignment 01 and 02) count 20% towards your final mark. The mark obtained by you in the examination will determine the remaining 80% of your final mark for this module. 11.2 Examination period This module is offered in a semester period of fourteen weeks. This means that if you are registered for the first semester, you will write the examination in May/June 2016 and the supplementary examination will be written in October/November 2016. If you are registered for the second semester you will write the examination in October/November 2016 and the supplementary examination will be written in May/June 2017. During the module time-frame of the respective semester, the Examination Section will provide you with information regarding the examination in general, examination venues, examination dates and examination times. 11.3 Previous examination papers The University Rules (paragraph 32) have been amended to specifically provide that the University will not make previous years examination papers and memoranda and so-called “model answers” of previous examination papers available to students. 11.4 Information on the examination To help you in your preparation for the examination you will receive an exam letter as an annexure to a study letter. This letter will include information that will explain the format of the examination paper and general advice the lecturers want to share with students. 11.5 Calculator policy Candidates may only use silent, electronic, battery-driven pocket calculators subject to the following conditions: • Calculators must be cordless, and may not have print-out facilities or alpha keys, • Any financial calculator will be allowed as the following table of present values will not be provided:

o Tables of present value factors for various interest rates for varying periods, o Tables of future value factors for various interest rates for varying periods,

• The calculator function on mobile telephones or any electronic device (i.e. laptops and /or any Smart phone) may not be used, and

• Candidates may not share a calculator with another candidate in the examination room. 12 FREQUENTLY ASKED QUESTIONS The publication myStudies@Unisa contains an A-Z guide of the most relevant study information. 13 SOURCES CONSULTED None. 14 CONCLUSION We would like to encourage you to approach your studies with enthusiasm. Remember, success can only be achieved by hard work and perseverance. We wish you a pleasant study period.

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15 ANNEXURE ANNEXURE A: ASSIGNMENT 01/2016 - COMPULSORY (FIRST SEMESTER ONLY)

ANNEXURE B: ASSIGNMENT 02/2016 - COMPULSORY (FIRST SEMESTER ONLY)

ANNEXURE C: ASSIGNMENT 01/2016 - COMPULSORY (SECOND SEMESTER ONLY)

ANNEXURE D: ASSIGNMENT 02/2016 - COMPULSORY (SECOND SEMESTER ONLY)

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ANNEXURE A: COMPULSORY ASSIGNMENT 01 (MCQ) – FIRST SEMESTER

SEMESTER 1 UNIQUE NUMBER: 712575 DUE DATE: 16 MARCH 2016

PLEASE NOTE: 1. This assignment consists of 10 multiple choice questions. 2. This assignment covers learning units 1 and 2 of tutorial letter MO 001. Work carefully through the

relevant tutorial matter before you attempt the assignment. 3. No extension will be granted for the late submission of this assignment and no correspondence or

telephone conversations will be conducted in this regard. 4. It is strongly recommended that the assignment be submitted via myUnisa. INSTRUCTIONS FOR SUBMISSION ON MARK-READING SHEETS: • Only mark-reading sheets provided may be used. • Colour in the correct block with a HB pencil. • Fill in your student number correctly. • Fill in the assignment number correctly. • Fill in the unique number of the assignment for the specific module and semester correctly.

Every assignment which is marked by the computer is given a unique number. The number contains information on the module code and assignment number. When the computer reads the mark-reading sheet with, say, the unique number 712575, it “identifies” that it is Assignment 01 for that specific module.

• Answer each numbered question at the relevant answer number. • Send only your mark-reading sheet to the Assignment Section in the appropriate envelope. PLEASE DO NOT: • Make more than one mark per question; • tear or fold the mark-reading sheet; • staple the mark reading sheet to another piece of paper; • colour outside the block; • colour in the block with a pen; • make corrections with Tippex; • submit answers on a written sheet of paper, or • try to repair a torn mark-reading sheet with sticky tape - use another one.

SUBMISSION OF ASSIGNMENT 01 IS COMPULSORY TO OBTAIN EXAMINATION ADMISSION. ASSIGNMENT 01 TOGETHER WITH ASSIGNMENT 02 COUNTS 20% TOWARDS YOUR FINAL MARK. THIS ASSIGNMENT CONTRIBUTES 5% TOWARDS YOUR FINAL MARK FOR THIS MODULE.

VERY IMPORTANT: Assignments received after the due date will not be marked. No exceptions in this regard will be made. It is important that you keep a copy of your submitted assignment as well as the submission reference number, to facilitate enquiries at a later date.

FAC3704/101

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ASSIGNMENT 01 (COMPULSORY)(FIRST SEMESTER) MULTIPLE CHOICE QUESTIONS Study: Learning units 1 to 2 of tutorial letter MO 001; and Chapters 1 to 6 of Group Statements – Volume 1

The following are extracts from the trial balances of Fig Ltd and Olive Ltd for the year ended 31 December 2015: Fig Ltd Olive Ltd R R DEBITS Property, plant and equipment at carrying amount ............................. 784 000 644 600 Investment in Olive Ltd at fair value ................................................... 820 000 - Inventory ......................................................................................... 552 000 693 000 Trade receivables ............................................................................... 320 000 397 600 Cash and cash equivalents................................................................. 176 250 542 000 Cost of sales ...................................................................................... 578 000 658 900 Other expenses .................................................................................. 343 000 297 000 Income tax expense ........................................................................... 392 000 189 000 Ordinary dividends paid – 31 December 2015 .................................... 80 000 40 000 Preference dividends paid – 31 December 2015 ................................ - 10 000 4 045 250 3 472 100 CREDITS

Share capital – 400 000 ordinary shares ............................................ 1 000 000 - Share capital – 200 000 ordinary shares ............................................ - 800 000 Preference share capital – 100 000 10% preference shares ............... - 100 000 Retained earnings – 1 January 2015 .................................................. 319 780 549 000 Mark-to-market reserve – 1 January 2015 .......................................... 61 014 - Deferred tax on mark-to-market reserve ............................................ 20 513 - Trade and other payables .................................................................. 294 270 392 200 Revenue ......................................................................................... 1 683 200 1 297 300 Other income ...................................................................................... 638 000 333 600 Other comprehensive income – fair value adjustment on equity investments, net of tax ........................................................................

28 473

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4 045 250 3 472 100 Additional information 1. On 1 June 2013, Fig Ltd acquired control over Olive Ltd by acquiring 120 000 of the issued ordinary

shares of Olive Ltd. On this date the retained earnings of Olive Ltd amounted to R120 000. The consideration paid was settled in cash amounting to R600 000 and equipment with a fair value of R110 000 (carrying amount R110 000). At the acquisition date the market value of one Olive Ltd ordinary share was R5,40 per share.

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2. On 1 June 2013, the fair value of the identifiable assets and liabilities of Olive Ltd were considered to be equal to the carrying amounts thereof, except for the following items which have not yet been accounted for in the accounting records of Olive Ltd:

Fair value Carrying amount R R Vacant piece of land 800 000 600 000 Inventory 75 000 95 000 Trade receivables 30 000 40 000

3. Fig Ltd did not acquire any of the preference shares of Olive Ltd. The preference shareholders have

a preferential right to their dividend payment and will receive the return on their investment upon liquidation of the acquiree. All preference dividends had been paid up to and including 31 December 2015. The fair value of the preference shares on 1 June 2013 was R110 000.

4. Since 1 June 2013, Fig Ltd sold inventory to Olive Ltd. Fig Ltd sells inventory at a profit mark-up of

20% on the cost price. The intragroup sales between the two entities during the current financial year amounted to R168 000. On 31 December 2015, Olive Ltd had inventory of R105 000 on hand which was purchased from Fig Ltd (31 December 2014: R63 000). At 31 December 2015 an amount of R50 000 relating to the inventory purchased was still due to Fig Ltd by Olive Ltd. The outstanding amount is included in “trade receivables” of Fig Ltd and “trade payables” of Olive Ltd.

5. On 1 March 2015, Olive Ltd sold furniture with a carrying amount of R250 000 to Fig Ltd for R310 000. The furniture had a remaining useful life of two years on the date of sale. Both companies depreciate furniture over the expected useful life of the asset using the straight line method. This is consistent with the allowance received by the South African Revenue Service. The profit on the sale of the furniture is included in “other income” in the accounting records of Olive Ltd.

6. The Fig Ltd Group measures its investments in equity instruments at fair value through other comprehensive income.

7. The Fig Ltd Group measures non-controlling interests at fair value at the date of acquisition (full goodwill method).

8. Goodwill relating to the investment in Olive Ltd was tested for impairment on 31 December 2015 and the directors of the Fig Ltd Group determined that the goodwill was impaired by R15 000.

9. The SA normal tax rate is 28% and the capital gains inclusion rate is calculated at 66,6% of the

normal tax rate. You may assume that both tax rates have remained unchanged since 1 June 2013.

10. Each share carries one vote and the share capital has remained unchanged since 1 June 2013. REQUIRED: Answer the following questions by choosing the correct option out of the five options given for each question. There is only ONE correct answer for each question. All amounts should be rounded to the nearest Rand. All answers should comply with the requirements of International Financial Reporting Standards (IFRS).

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QUESTION 1

The amount of goodwill calculated in terms of IFRS 3.32 relating to the investment in the ordinary shares of Olive Ltd as at 1 June 2013, is: (1) R73 338 (2) R80 896 (3) R20 000 (4) R58 338 (5) R84 560 QUESTION 2

The amount that will be disclosed as revenue in the consolidated statement of profit or loss and other comprehensive income of the Fig Ltd Group for the year ended 31 December 2015, is: (1) R2 360 780 (2) R2 293 580 (3) R2 812 500 (4) R2 276 080 (5) R2 985 500 QUESTION 3

The amount that will be disclosed as share capital (ordinary shares) in the consolidated statement of financial position of the Fig Ltd Group as at 31 December 2015, is: (1) R1 000 000 (2) R1 800 000 (3) R1 900 000 (4) R900 000 (5) R800 000 QUESTION 4

The pro-forma consolidation journal entry required to account for the impairment of goodwill in the accounting records of the Fig Ltd Group as at 31 December 2015, is: (1) Dr Other expenses (P/L) R15 000 Cr Goodwill (SFP) 15 000 (2) Dr Other expenses (P/L) R15 000 Cr Goodwill (SFP) R15 000 Dr Non-controlling interests (SFP) R6 000 Cr Non-controlling interests (P/L) R6 000 (3) Dr Other expenses (P/L) R9 000 Cr Goodwill (SFP) R9 000 (4) Dr Other expenses (P/L) R9 000 Cr Goodwill (SFP) R9 000 Dr Non-controlling interests (SFP) R6 000 Cr Non-controlling interests (P/L) R6 000 (5) Dr Other expenses (P/L) R9 000 Dr Non-controlling interests (P/L) R6 000 Cr Goodwill (SFP) R15 000

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QUESTION 5

The amount that will be disclosed as total dividends paid in the non-controlling interests’ column of the consolidated statement of changes in equity of the Fig Ltd Group for the year ended 31 December 2015, is: (1) R40 000 (2) R30 000 (3) R26 000 (4) R50 000 (5) R16 000 QUESTION 6

The amount that will be disclosed as property, plant and equipment in the consolidated statement of financial position of the Fig Ltd Group as at 31 December 2015, is: (1) R1 593 600 (2) R1 428 600 (3) R1 628 600 (4) R1 572 600 (5) R1 568 600 QUESTION 7

The amount that will be disclosed as cash and cash equivalents in the consolidated statement of financial position of the Fig Ltd Group as at 31 December 2015, is: (1) R501 450 (2) R718 250 (3) R393 050 (4) R1 318 250 (5) R176 250 QUESTION 8

The amount that will be disclosed as mark-to-market reserve in the consolidated statement of financial position of the Fig Ltd Group as at 31 December 2015, is: (1) R416 000 (2) R24 506 (3) R61 014 (4) Rnil (5) R624 000

QUESTION 9

The amount that will be disclosed as trade and other payables in the consolidated statement of financial position of the Fig Ltd Group as at 31 December 2015, is: (1) R499 590 (2) R529 590 (3) R686 470 (4) R636 470 (5) R656 470

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QUESTION 10 At acquisition date, 1 June 2013, the non-controlling interests relating to Olive Ltd’s preference shares will be: (1) R100 000 (2) R110 000 (3) R44 000 (4) R40 000 (5) R60 000

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ANNEXURE B: COMPULSORY ASSIGNMENT 02 (WRITTEN) – FIRST SEMESTER

SEMESTER 1 UNIQUE NUMBER: 829357 DUE DATE: 13 APRIL 2016

PLEASE NOTE:

1. This assignment consists of only one (1) question with subsections.

2. All subsections of this question must be answered.

3. All calculations must be shown. 4. Please follow the instructions in the required part of the question carefully to ensure that you obtain

the maximum marks for the subsections of the question. 5. This assignment covers learning units 1 to 5 of the tutorial letter MO 001. Work carefully through the

relevant tutorial matter before you attempt the assignment. 6. No extension will be granted for the late submission of this assignment and no correspondence or

telephone conversations will be conducted in this regard. 7. Please follow the instructions for the submission of the written assignment carefully. INSTRUCTIONS FOR SUBMISSION OF WRITTEN ASSIGNMENTS Written assignments can be submitted as follows: • electronically via myUnisa; or • placed in the assignment envelope in a UNISA assignment post box; or • mailed by using ordinary post using the envelope supplied. IT IS STRONGLY RECOMMENDED THAT YOU SUBMIT YOUR ASSIGNMENT

ELECTRONICALLY VIA myUNISA.

PLEASE NOTE: • If you electronically submit the written assignment via myUnisa the file must be converted to or

scanned in PDF-format. The page orientation MUST be portrait. • The assignment must be scanned and submitted as only one PDF file. The PDF file must not be a

“read only” file. • Any format other than PDF will not be accepted by myUnisa. • Please ensure that you have submitted the correct assignment.

ASSIGNMENT 01 TOGETHER WITH ASSIGNMENT 02 COUNTS 20% TOWARDS YOUR FINAL MARK.

THIS ASSIGNMENT CONTRIBUTES 15% TOWARDS YOUR FINAL MARK FOR THIS MODULE.

VERY IMPORTANT:

Assignments received after the due date will not be marked. No exceptions in this regard will be made. It is your responsibility to ensure that the correct assignment is submitted in the correct format.

It is important that you keep a copy of your submitted assignment as well as the submission reference number, to facilitate enquiries at a later date.

FAC3704/101

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ASSIGNMENT 02 (COMPULSORY)(FIRST SEMESTER) WRITTEN ASSIGNMENT (50 marks) Study: Learning Units 1 to 5 of Tutorial Letter MO 001; and Chapters 1 to 8 of Group Statements – Volume 1; and Chapters 9 to 11 of Group Statements – Volume 2.

The following are extracts from the trial balances of AB Ltd, Tendu Ltd and Sanga Ltd for the year ended 31 December 2015:

AB Ltd

Tendu Ltd

Sanga Ltd

Dr/(Cr) Dr/(Cr) Dr/(Cr) R R R Property, plant and equipment at carrying amount ......... 4 700 700 4 235 000 1 250 000 Investments in equity instruments:

- Tendu Ltd at fair value ................................................. 920 000 - - - Sanga Ltd at fair value ................................................. 550 000 - - - Raba Ltd at fair value ................................................... 600 000 - - - Malin Ltd at fair value ................................................... 54 100 - - Loan to Tendu Ltd ........................................................... 75 000 - - Loan to Sanga Ltd ........................................................... 55 000 - - Trade and other receivables............................................ 852 500 452 100 250 120 Cash and cash equivalents ............................................. 241 000 158 000 99 200 Inventories ...................................................................... 520 120 233 990 81 110 Cost of sales ................................................................... 3 529 550 2 110 250 720 000 Other expenses............................................................... 322 000 172 000 259 700 Finance charges ............................................................. - 6 000 4 400 Income tax expense ........................................................ 719 393 539 725 103 628 Dividends paid – 31 December 2015 .............................. 200 000 80 000 20 000 Share capital – 200 000 ordinary shares ......................... (200 000) - - Share capital – 100 000 ordinary shares ......................... -

(100 000)

Share capital – 50 000 ordinary shares ........................... - - (50 000) Retained earnings – 1 January 2015 ............................... (5 897 333) (3 262 825) (1 239 358) Mark-to-market reserve – 1 January 2015 ....................... (178 974) - - Deferred tax on mark-to-market reserve ......................... (43 655) - - Loan from AB Ltd ............................................................ - (75 000) (55 000) Trade and other payables ............................................... (587 120) (333 400) (89 600) Revenue ......................................................................... (5 895 410) (3 963 440) (1 200 000) Other income .................................................................. (525 400) (252 400) (154 200) Other comprehensive income – fair value adjustments on equity instruments (after tax) ...................................... (11 471) - -

- - -

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Additional information

1. On 1 January 2014, AB Ltd acquired 30 000 of the issued ordinary shares of Tendu Ltd. Since this date AB Ltd exercised joint control over the financial and operating policies of Tendu Ltd in terms of a contractual agreement. The arrangement was classified as a joint venture in accordance with IFRS 11, Joint Arrangements. On the acquisition date there were no unidentified assets, liabilities or contingent liabilities and the assets and liabilities of Tendu Ltd were considered to be fairly valued.

2. The following is an extract from the statement of financial position of Tendu Ltd as at 1 January 2014:

R Share capital – 100 000 ordinary shares .............................................................. 100 000 Retained earnings ................................................................................................ 2 650 000 Mark-to-market reserve ......................................................................................... 4 000

3. On 1 January 2015, AB Ltd acquired 20 000 of the issued ordinary shares of Sanga Ltd for R550 000. In terms of a contractual agreement with the other operators, AB Ltd exercises joint control over the economic activities of Sanga Ltd. The arrangement was classified as a joint operation in accordance with IFRS 11, Joint Arrangements. The contractual arrangement specifies that all revenues, expenses, assets and liabilities are allocated according to the percentage interest held by the operators. At the acquisition date, the fair value of all the identifiable assets and liabilities of Sanga Ltd were considered to be equal to the carrying amounts thereof.

4. On 1 September 2015, AB Ltd acquired control of Raba Ltd by acquiring an 80% interest in the issued ordinary share capital of Raba Ltd for R600 000. At this date, the fair values of all the identifiable assets and liabilities of Raba Ltd were equal to their carrying amounts. On 1 September 2015, the equity of Raba Ltd consisted of share capital of R150 000 and retained earnings of R645 000.

5. The following is an extract from the trial balance of Raba Ltd for the year ended 31 December 2015: R Dr/(Cr) Revenue ............................................................................................................... (960 000) Cost of sales ........................................................................................................ 479 400 Other income ........................................................................................................ (95 400) Other expenses ..................................................................................................... 115 590 Income tax expense .............................................................................................. 128 916 Other comprehensive income – fair value adjustment on equipment (after tax) ..... (20 160) Dividends paid – 31 December 2015 ..................................................................... 15 000 Other comprehensive income (R20 160) in the trial balance of Raba Ltd relates to the revaluation of equipment to fair value on 31 December 2015.

6. The mark-to-market reserve for the year ended 31 December 2015, is made up as follows:

Investment in Tendu Ltd

Investment in Malin Ltd

Mark-to-market reserve R R Balance at 1 January 2015 ............................................................. 178 974 - Current year ................................................................................... - 11 471 Balance at 31 December 2015 178 974 11 471

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7. On 1 February 2015, AB Ltd acquired a 15% interest in the ordinary shares of Malin Ltd for R40 000. AB Ltd revalued its investment in Malin Ltd to fair value on 31 December 2015.

8. AB Ltd provided accounting services to Tendu Ltd and Sanga Ltd since the beginning of the current

financial year. A monthly accounting fee of R2 000 is payable to AB Ltd by each entity for the accounting services. Accounting fees received by AB Ltd are included in “other income” and accounting fees paid by Tendu Ltd and Sanga Ltd are included in “other expenses”. At year end, there were no outstanding accounting fees.

9. The loans made by AB Ltd to Tendu Ltd and Sanga Ltd bear interest at 8% per annum and are repayable in full on 31 December 2017.

10. On 1 June 2015, Tendu Ltd sold a vacant piece of land to AB Ltd. Tendu Ltd made a profit of R85

000 on the sale of the land. The profit on the sale of the land was included in “other income” in the accounting records of Tendu Ltd.

11. Since 1 January 2015, Sanga Ltd sold inventories to AB Ltd at a mark-up of 20% on the cost price.

The total sales from Sanga Ltd to AB Ltd for the year amounted to R670 000. At 31 December 2015, AB Ltd had sold 75% of the total inventory purchased from Sanga Ltd during the year to entities outside of the group.

12. The AB Ltd group measures its investments in equity instruments at fair value through other

comprehensive income.

13. The AB Ltd Group measures non-controlling interests in an acquiree at their proportionate share of the net assets (partial goodwill method).

14. You may assume that the SA normal tax rate is 28% and the capital gains tax is calculated at 66,6%

of the normal tax rate. You may assume that both the tax rates have remained unchanged since 1 January 2014.

15. Each share carries one vote and the share capital has remained unchanged since 1 January 2014.

16. The profits of all the entities were earned evenly throughout the year, unless otherwise stated

(including intragroup transactions). REQUIRED: a) Prepare the consolidated statement of profit or loss and other comprehensive income of the

AB Ltd Group for the year ended 31 December 2015. (36) b) Prepare the consolidated statement of changes in equity of the AB Ltd Group for the year ended

31 December 2015. (14)

All answers should comply with the requirements of International Financial Reporting Standards (IFRS). All amounts should be rounded to the nearest Rand. Comparative figures and notes to the consolidated financial statements are not required.

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ANNEXURE C: COMPULSORY ASSIGNMENT 01 (MCQ) – SECOND SEMESTER

SEMESTER 2 UNIQUE NUMBER: 848139 DUE DATE: 15 AUGUST 2016

PLEASE NOTE: 1. This assignment consists of 10 multiple choice questions. 2. This assignment covers learning units 1 and 2 of tutorial letter MO 001. Work carefully through the

relevant tutorial matter before you attempt the assignment. 3. No extension will be granted for the late submission of this assignment and no correspondence or

telephone conversations will be conducted in this regard. 4. It is strongly recommended that the assignment be submitted via myUnisa. INSTRUCTIONS FOR SUBMISSION ON MARK-READING SHEETS: • Only mark-reading sheets provided may be used. • Colour in the correct block with a HB pencil. • Fill in your student number correctly. • Fill in the assignment number correctly. • Fill in the unique number of the assignment for the specific module and semester correctly.

Every assignment which is marked by the computer is given a unique number. The number contains information on the module code and assignment number. When the computer reads the mark-reading sheet with, say, the unique number 848139, it “identifies” that it is Assignment 01 for that specific module.

• Answer each numbered question at the relevant answer number. • Send only your mark-reading sheet to the Assignment Section in the appropriate envelope. PLEASE DO NOT: • Make more than one mark per question; • tear or fold the mark-reading sheet; • staple the mark reading sheet to another piece of paper; • colour outside the block; • colour in the block with a pen; • make corrections with Tippex; • submit answers on a written sheet of paper, or • try to repair a torn mark-reading sheet with sticky tape - use another one.

SUBMISSION OF ASSIGNMENT 01 IS COMPULSORY TO OBTAIN EXAMINATION ADMISSION. ASSIGNMENT 01 TOGETHER WITH ASSIGNMENT 02 COUNTS 20% TOWARDS YOUR FINAL MARK. THIS ASSIGNMENT CONTRIBUTES 5% TOWARDS YOUR FINAL MARK FOR THIS MODULE.

VERY IMPORTANT: Assignments received after the due date will not be marked. No exceptions in this regard will be made. It is important that you keep a copy of your submitted assignment as well as the submission reference number, to facilitate enquiries at a later date.

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ASSIGNMENT 01 (COMPULSORY)(SECOND SEMESTER) MULTIPLE CHOICE QUESTIONS Study: Learning units 1 to 2 of tutorial letter MO 001; and Chapters 1 to 6 of Group Statements – Volume 1 The following are extracts from the trial balances of Scooby Ltd and Scrappy Ltd for the year ended 31 December 2015: Scooby

… . Ltd Scrappy

…… ..Ltd R R DEBITS Property, plant and equipment at carrying amount ............................. 1 036 322 663 600 Investment in Scrappy Ltd at cost price .............................................. 810 000 - Investment in Goofy Ltd at fair value .................................................. - 50 000 Investment in Droopy Ltd at fair value ................................................ 62 500 - Inventory… ......................................................................................... 793 000 255 200 Trade receivables ............................................................................... 480 000 349 971 Cash and cash equivalents................................................................. 334 514 - Accumulated loss – 1 January 2015 ................................................... - 170 387 Cost of sales ...................................................................................... 867 000 804 000 Other expenses .................................................................................. 1 236 761 537 500 Income tax expense ........................................................................... 612 650 - Dividends paid – 31 December 2015 .................................................. 120 000 - 6 352 747 2 830 658 CREDITS Share capital – 600 000 ordinary shares ............................................ 1 500 000 - Share capital – 760 000 ordinary shares ............................................ - 950 000 Retained earnings – 1 January 2015 .................................................. 417 805 - Mark-to-market reserve – 1 January 2015 .......................................... 10 000 12 338 Deferred tax ...................................................................................... 42 500 12 333 Loan from Scooby Ltd ........................................................................ - 330 000 Trade payables ................................................................................... 86 405 281 200 Bank overdraft ................................................................................... - 117 800 Revenue ......................................................................................... 3 334 800 995 000 Other income ...................................................................................... 957 000 123 987 Other comprehensive income – fair value adjustment on equity investments, net of tax ........................................................................

4 237

8 000

6 352 747 2 830 658 Additional information 1. On 1 June 2013, Scooby Ltd acquired control over Scrappy Ltd by acquiring 570 000 of the issued

ordinary shares of Scrappy Ltd. The consideration paid was settled in cash amounting to R810 000. On this date the retained earnings of Scrappy Ltd amounted to R125 000 and the mark-to-market reserve R1 333.

2. On 1 June 2013, there were no unidentified assets, liabilities or contingent liabilities and the fair values of all assets and liabilities of Scrappy Ltd were considered to be equal to the carrying amounts thereof.

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3. On 31 December 2013, Scooby Ltd wrote off the full loan made to Scrappy Ltd, against “retained earnings” in its own separate accounting records.

4. During the current financial year, Scooby Ltd started selling inventory to Scrappy Ltd at a profit

mark-up of 40% on the selling price. During the current financial year the total sales of inventory from Scooby Ltd to Scrappy Ltd amounted to R350 000. At 31 December 2015, Scrappy Ltd had inventory of R120 000 on hand which was purchased from Scooby Ltd.

5. On 30 June 2015, Scooby Ltd sold a delivery vehicle at a profit of R25 000 to Scrappy Ltd. The

delivery vehicle had a remaining useful life of four years on the date of sale. Both companies depreciate delivery vehicles over the expected useful life of the asset using the straight line method. This is consistent with the allowance received by the South African Revenue Service. The profit on the sale of the vehicle is included in “other income” in the accounting records of Scooby Ltd.

6. During the current financial year Scrappy Ltd purchased stationery, amounting to R50 000, from

Scooby Ltd. Scooby Ltd accounted for the sale of stationery as “other income” and Scrappy Ltd accounted for the purchase of stationery as “other expenses” in their respective accounting records.

7. The depreciation expense included in “other expenses” for the year ended 31 December 2015, is

as follows:

Scooby ….Ltd

Scrappy ……..Ltd

R R Depreciation .............................................................................. 699 261 62 500

8. The Scooby Ltd Group measures its investments in equity instruments at fair value through other comprehensive income. The fair value adjustments on the investments in equity instruments in the accounting records of Scooby Ltd relates only to the investment in Droopy Ltd.

9. The Scooby Ltd Group measures non-controlling interests in an acquiree at its proportional share

of the aquiree’s identifiable net assets at acquisition date (partial goodwill method).

10. On 31 December 2015, goodwill was tested for impairment and it was determined by the directors of Scooby Ltd that the goodwill was impaired with R2 750 at the end of the current financial year.

11. The SA normal tax rate is 28% and the capital gains inclusion rate is calculated at 66,6% of the

normal tax rate. You may assume that both tax rates have remained unchanged since 1 June 2013.

12. Each share carries one vote and the share capital has remained unchanged since 1 June 2013. 13. Both companies have a 31 December year-end. REQUIRED: Answer the following questions by choosing the correct option out of the five options given for each question. There is only ONE correct answer for each question. All amounts should be rounded to the nearest Rand. All answers should comply with the requirements of International Financial Reporting Standards (IFRS).

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QUESTION 1 The amount that will be disclosed as goodwill in the consolidated statement of financial position of the Scooby Ltd Group as at 31 December 2015, is: (1) R3 750 (2) Rnil (3) R3 467 (4) R2 750 (5) R161 450 QUESTION 2 The amount that will be disclosed as cash and cash equivalents in the consolidated statement of financial position of the Scooby Ltd Group as at 31 December 2015, is: (1) R246 164 (2) R334 514 (3) (R117 800) (4) R82 908 (5) R216 714 QUESTION 3 The amount that will be disclosed as opening retained earnings in the consolidated statement of changes in equity of the Scooby Ltd Group for the year ended 31 December 2015, is: (1) R247 418 (2) R588 192 (3) R196 265 (4) R581 347 (5) R526 265 QUESTION 4 The amount that will be disclosed as mark-to-market reserve in the consolidated statement of financial position of the Scooby Ltd Group as at 31 December 2015, is: (1) R22 338 (2) R34 444 (3) R28 491 (4) R34 575 (5) R18 254 QUESTION 5 The amount that will be disclosed as inventory in the consolidated statement of financial position of the Scooby Ltd Group as at 31 December 2015, is: (1) R1 000 200 (2) R1 013 640 (3) R946 120 (4) R984 400 (5) R1 013 914

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QUESTION 6 The amount that will be disclosed as share capital in the consolidated statement of financial position of the Scooby Ltd Group as at 31 December 2015, is: (1) R1 500 000 (2) R2 450 000 (3) R2 212 500 (4) R950 000 (5) R2 070 000 QUESTION 7 The amount that will be disclosed as other income in the consolidated statement of profit or loss and other comprehensive income of the Scooby Ltd Group for the year ended 31 December 2015, is: (1) R1 012 987 (2) R1 030 987 (3) R1 055 987 (4) R1 005 987 (5) R1 019 987 QUESTION 8 The amount of depreciation that will be disclosed as other expenses in the consolidated statement of profit or loss and other comprehensive income of the Scooby Ltd Group for the year ended 31 December 2015, is: (1) R755 511 (2) R759 511 (3) R758 636 (4) R746 136 (5) R764 886 QUESTION 9 The amount that will be disclosed as other investments in the consolidated statement of financial position of the Scooby Ltd Group as at 31 December 2015, is: (1) R100 000 (2) R92 500 (3) R922 500 (4) R70 000 (5) R112 500 QUESTION 10 The amount that will be disclosed as profit for the year attributable to non-controlling interests in the consolidated statement of profit or loss and other comprehensive income of the Scooby Ltd Group for the year ended 31 December 2015, is: (1) R71 086 (2) R40 171 (3) R28 932 (4) R55 628 (5) R140 188

FAC3704/101

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ANNEXURE D: COMPULSORY ASSIGNMENT 02 (WRITTEN) – SECOND SEMESTER

SEMESTER 2 UNIQUE NUMBER: 779486 DUE DATE: 8 SEPTEMBER 2016

PLEASE NOTE:

1. This assignment consists of only one (1) question with subsections.

2. All subsections of this question must be answered.

3. All calculations must be shown.

4. Please follow the instructions in the required part of the question carefully to ensure that you obtain the maximum marks of the question.

5. This assignment covers learning units 1 to 5 of the tutorial letter MO 001. Work through the relevant tutorial matter carefully before you attempt the assignment.

6. No extension will be granted for the late submission of this assignment and no correspondence or telephone conversations will be conducted in this regard.

7. Please follow the instructions for the submission of the written assignment carefully. INSTRUCTIONS FOR SUBMISSION OF WRITTEN ASSIGNMENTS Written assignments can either be submitted as follows: • electronically via myUnisa; or • placed in the assignment envelope in a UNISA assignment post box; or • mailed by using ordinary post using the envelope supplied. IT IS STRONGLY RECOMMENDED THAT YOU SUBMIT YOUR ASSIGNMENT

ELECTRONICALLY VIA myUNISA.

PLEASE NOTE: • If you electronically submit the written assignment via myUnisa the file must be converted to or

scanned in PDF-format. The page orientation MUST be portrait. • The assignment must be scanned and submitted as only one PDF file. The PDF file must not be a

“read only” file. • Any format other than PDF will not be accepted by myUnisa. • Please ensure that you have submitted the correct assignment.

ASSIGNMENT 01 TOGETHER WITH ASSIGNMENT 02 COUNT 20% TOWARDS YOUR FINAL MARK.

THIS ASSIGNMENT CONTRIBUTES 15% TOWARDS YOUR FINAL MARK FOR THIS MODULE.

VERY IMPORTANT:

Assignments received after the due date will not be marked. No exceptions in this regard will be made. It is your responsibility to ensure that the correct assignment is submitted in the correct format.

It is important that you keep a copy of your submitted assignment as well as the submission reference number, to facilitate enquiries at a later date.

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ASSIGNMENT 02 (COMPULSORY)(SECOND SEMESTER) WRITTEN ASSIGNMENT (50 marks) Study: Learning Units 1 to 5 of Tutorial Letter MO 001; Chapters 1 to 8 of Group Statements – Volume 1; and Chapters 9 to 11 of Group Statements – Volume 2

The following are extracts from the trial balances of Alpha Ltd, Beta Ltd, Ceta Ltd and Delta Ltd for the year ended 30 September 2015:

Alpha Ltd

Beta Ltd

Ceta Ltd

Delta Ltd

R R R R

Debits Property, plant and equipment at carrying amount…….. ............................................... 1 754 205 1 596 704 640 000 979 760 Investments in equity instruments:

- Beta Ltd at fair value ................................. 1 200 000 - - - - Ceta Ltd at fair value ................................. 396 264 - - - - Delta Ltd at fair value ................................ 500 775 - - - - Elta Ltd at fair value .................................. - 40 000 - - Trade and other receivables ........................ 785 200 654 000 751 000 580 682 Cash and cash equivalents ......................... 960 858 754 633 678 523 521 555 Inventories ................................................. 380 000 270 000 452 000 385 600 Cost of sales ............................................... 950 000 765 300 865 200 760 520 Other expenses ........................................... 286 000 360 452 186 300 256 420 Income tax expense .................................... 242 623 332 901 139 442 88 226 Dividends paid – 30 September 2015 ......... 100 000 50 000 10 000 - 7 555 925 4 823 990 3 722 465 3 572 763 Credits Share capital:

- 500 000 ordinary shares ........................... 1 000 000 - - - - 350 000 ordinary shares ........................... - 350 000 - - - 200 000 ordinary shares ........................... - - 300 000 - - 150 000 ordinary shares ........................... - - - 150 000 Retained earnings – 1 October 2014 ........... 3 614 718 1 356 950 976 321 1 239 545 Mark-to-market reserve – 1 October 2014 ... 20 338 - - - Trade and other payables ........................... 813 697 792 355 860 637 851 185 Revenue…… .............................................. 1 532 658 1,659 823 1 113 256 962 581 Other income .............................................. 569 852 654 862 436 251 369 452 Other comprehensive income – fair value adjustment on equity investments, net of tax…………………….. ................................. - 8 135 - - Other comprehensive income – fair value adjustments on land, net tax ....................... - - 29 287 - Deferred tax ................................................ 4 662 1 865 6 713 - 7 555 925 4 823 990 3 722 465 3 572 763

FAC3704/101

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Additional information

1. On 1 October 2012, Alpha Ltd acquired control over Beta Ltd by acquiring 80% of the issued ordinary shares of Beta Ltd when the retained earnings of Beta Ltd amounted to R860 000. On this date, the assets and liabilities of Beta Ltd were considered to be fairly valued except for trade receivables that had a carrying amount of R198 000 and a fair value of R193 000.

2. On 1 January 2013, Alpha Ltd acquired 80 000 of the issued ordinary shares of Ceta Ltd for R396 264, when the retained earnings amounted to R690 660. Since 1 January 2013, Alpha Ltd exercised significant influence over the financial and operating policy decisions of Ceta Ltd. At the date of acquisition, Ceta Ltd had no unidentified assets or liabilities and the carrying amounts of all assets and liabilities were equal to the fair values thereof.

3. On 1 October 2013, Alpha Ltd acquired 50% of the issued ordinary shares in Delta Ltd for an amount of R500 775 when the retained earnings of Delta Ltd amounted to R851 550. Since 1 October 2013, Alpha Ltd exercised joint control over the economic activities of Delta Ltd. The arrangement was classified as a joint operation in accordance with IFRS 11, Joint Arrangements. The contractual arrangement specifies that all revenues, expenses, assets and liabilities are allocated according to the percentage interest held by the operators. On the date of acquisition the fair values of all the identifiable assets and liabilities of Delta Ltd were considered to be equal to the carrying amounts thereof.

4. Alpha Ltd sells inventory to Ceta Ltd and Delta Ltd at a profit mark-up of 20% on the cost price. The

following sales were made by Alpha Ltd to Ceta Ltd and Delta Ltd for the year ended 30 September 2015:

Customer Total sales for the year ended 30 September 2015 R

Ceta Ltd 82 500 Delta Ltd 62 500

5. The following inventory that was purchased from Alpha Ltd by Ceta Ltd and Delta Ltd was still on

hand at the respective dates in the accounting records of Ceta Ltd and Delta Ltd:

Inventory on hand: 30 September 2014 30 September 2015 R R

Ceta Ltd 30 000 27 000 Delta Ltd - 17 500

6. During the current financial year, Delta Ltd paid Alpha Ltd R40 000 for management services

rendered. The management fees paid were accounted for as “other expenses” in the accounting records of Delta Ltd and as “other income” in the accounting records of Alpha Ltd.

7. On 30 June 2015, Alpha Ltd sold a vacant piece of land to Delta Ltd for R450 000. Alpha Ltd originally acquired the land on 1 February 2013 for R350 000.

8. The fair value adjustment in the accounting records of Ceta Ltd relates to the revaluation of land of

R36 000 on 30 September 2015.

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9. The mark-to-market reserve in the accounting records of Alpha Ltd relates only to the fair value adjustment on the investment in Beta Ltd which took place in the prior year.

10. Beta Ltd acquired a 5% interest in Elta Ltd on 1 January 2015. The investment in Elta Ltd was revalued on 30 September 2015 to its fair value.

11. The Alpha Ltd Group measures any non-controlling interests in an acquiree at fair value (full goodwill method). The fair value of Beta Ltd’s shares on 1 October 2012 amounted to R4,50 per share. On 30 September 2015, goodwill was tested for impairment and it was determined by the directors of the Alpha Ltd Group that the goodwill in Beta Ltd was impaired to R235 000.

12. The Alpha Ltd group measures its investments in equity instruments at fair value through other

comprehensive income. You may assume that the fair values of investments in equity instruments are equal to the cost price thereof, unless otherwise indicated.

13. The SA normal tax rate is 28% and the capital gains tax inclusion rate is calculated at 66,6% of the

normal tax rate. You may assume that both the tax rates have remained unchanged since 1 October 2012.

14. Each share carries one vote and the share capital of all the companies has remained unchanged.

REQUIRED:

(a) Prepare the consolidated statement of profit or loss and othe