Arab Open University B291: TMA – 1st Semester 2015-2016 About TMA: The TMA covers the financial accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to asse

Arab Open University
B291: TMA – 1st Semester 2015-2016



About TMA:
The TMA covers the financial accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students’ understanding of some of the learning points within Books 1 to 5. This TMA requires you to apply the course concepts.

The TMA is intended to:
 Increase the students’ knowledge about the reality of the accounting as a profession.
 Assess students’ understanding of key learning points within Books 1 to 5.
 Develop the ability to understand and interact with the nature of the financial statements in reality.
 Develop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.
 Develop basic ICT skills such as using the internet.

The TMA:
The TMA requires you to:
1- Review various study Books (from 1 to 5) of ‘Financial Accounting’ within it.
2- Conduct a simple information search using the internet.
3- Present your findings in not more than 1,600 words. The word count excludes headings, references, title page, and diagrams.
4- You should use a Microsoft Office Word and Times New Roman Font of 14 points.
5- You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.

Criteria for Grade Distribution:
Criteria Content Using E-library & Referencing Structure and Presentation of ideas Total marks
Financial Reporting on the Internet: Philips
Marks 100 (5) (5) 100




The TMA Questions
Financial Reporting on the Internet
(Case study: Philips)
The internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study.
Koninklijke Philips N.V. (Royal Philips, commonly known as Philips) is a Dutch diversified technology company headquartered in Amsterdam with primary divisions focused in the areas of electronics, healthcare and lighting. It was founded in Eindhoven in 1891 by Gerard Philips and his father Frederik. It is one of the largest electronics companies in the world and employs around 105,000 people across more than 60 countries
Philips is organized into three main divisions: Philips Consumer Lifestyle (formerly Philips Consumer Electronics and Philips Domestic Appliances and Personal Care), Philips Healthcare (formerly Philips Medical Systems) and Philips Lighting. As of 2012 Philips was the largest manufacturer of lighting in the world measured by applicable revenues. In 2013, the company announced the sale of the bulk of its remaining consumer electronics operations to Japan's Funai Electric Co. but in October 2013, the deal to Funai Electric Co was broken off and the consumer electronics operations remain under Philips. Philips said it would seek damages for breach of contract in the $200-million sale.
Access the Philips home page at: http://www.philips.com/global. Access to About Philips then “Investor Relations”, next to: “Financial result” then “Annual report” and then finally downloads 2014 Annual Report.
You can directly access the annual report on the below link:
http://www.philips.com/about/investor/financialresults/annualreports/index.page




Instructions

Use the 2014 Annual report of Philips to answer the following questions:

1- One of the main functions of financial accounting is to communicate information to interested parties. List the different interested parties of Philips and give examples from the report to justify your answer. Also explain the reason of their interest in the financial statements..
[Marks (Words): 10(300)]

2- Organizations will carry out analyses of their external environment as part of their overall business planning to identify the constraints under which they must operate, to identify potential threats and opportunities and often to determine whether they will need professional accounting or business advice to deal with them. Identify these constraints under which Philips operates.
[Marks (Words): 10(300)]

3- Explain what you understand by matching principle in accounting, Support your answer with evidence from Philips annual report.
[Marks (Words): 10(100)]

4- Most business purchase goods on credit as well as for cash. Why do you think that credit is so important in business? Analyze the short term and long term credit position of Philips.
[Marks (Words): 10(100)]

5- IAS 2 Inventories lays down certain requirement in respect of inventory valuation. Explain the basic rule and discuss different methods of valuing inventory used by Philips.
[Marks (Words): 10(150)]

6- What do you understand by true and fair view? Refer to Philips annual report, elaborate the term true and fair view.
[Marks (Words): 10(150)]

7- In preparing financial statements in accordance with GAAP, there are certain accounting policies that may require a judgment or estimation in their application. Give examples of Philips estimates and assumptions reported in consolidated financial statements.
[Marks (Words): 10(200)]


8- IAS 16 Property, plant and equipment identifies and describes two different models of accounting for tangible non-current assets. Discuss the importance of these two models for Philips and describe the depreciation methods used by Philips.
[Marks (Words): 10(150)]

9- Elaborate the meaning of provisions. Give example of provisions from Philips annual report.
[Marks (Words): 10(150)]

10- Explain the meaning of horizontal analysis and vertical analysis. Describe the importance of horizontal and vertical analysis of financial statements on Philips. Give example from report.
[Marks (Words): 10(200)]

[Total Marks (Words) = 100(1,600)]


In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your work:

Cover The PT3 form (available on LMS)
Contents Title and contents page
TMA Financial Reporting on the Internet (Case study: Philips)
References Recorded according to the Harvard style - Available on LMS