2008 hongkong model financial statement
香港注册会计师公会综合考试考生答题表现Fpe_Dec08_Paper_I_Com
Qualification Programme Examination Panelists’ ReportFinal Examination(December 2008 Session)Paper I(The main purpose of the following report is to summarise candidates’ common weaknesses and make recommendations to help future candidates improve their examination performance.)(I) Section A – Case QuestionsGeneral CommentsCandidates often overly quoted guidance in the standards which is neither required by the question nor the purpose of the exam.Specific CommentsQuestion 1(a) – 8 marksThis question required candidates to identify the legal status and financial reporting obligations of two companies under the Hong Kong Companies Ordinance.Candidates’ performance was good. Better performing candidates were able to provide a well balanced answer. Many poorly performing candidates failed to identify the issues and copied blindly from the learning pack, the suggested solutions of past papers, or irrelevant materials such as the detailed requirements of HKFRSs on consolidated financial statements. Some poorly performing candidates simply could not tell the difference between the two companies, or were not aware that the question was about non-Hong Kong companies, or concentrated too much on the Listing Rules.Question 1(b) – 5 marksThe question required candidates to explain the concept of a “risk assessment process” as part of an internal control framework from the management’s point of view.Many candidates could not answer this, whilst some wrongly explained it from the perspective of the auditor rather than management.Candidates were also expected to distinguish the difference between business risk and the risk of misstatement of the financial statement, as the question had specifically required candidates to discuss the risk management process in the context of financial reporting. Very few candidates addressed this in their answers.Question 1(c) – 6 marksThe question required candidates to discuss the difference between the perspectives of an auditor and management with respect to the risk of non-compliance with laws and regulations, and to explain the purposes of assessing this risk.The question was generally answered satisfactorily. Many candidates were able to explain the differences in the perspectives between auditor and management, and were able to identify HKSA 250 as the relevant auditing standard. However, some candidates overly quoted the guidance in this standard which is not required in the question.Some candidates did not respond to the second part of the question which was to explain the purposes of assessing the risk of non-compliance with laws and regulations for auditors and for management.Question 1(d) – 6 marksThe question required candidates to discuss the internal controls that could be implemented to address the risk of non-compliance with laws and regulations. Overall, candidates performed satisfactorily in this question. Many candidates were able to identify some relevant internal controls. Often the reason for not being able to score a higher mark was due to candidates giving too few examples (2-3).Question 1(e) – 6 marksThis question required candidates to identify the principal business risk of the entity. Candidates’ performance in this question was good, probably similar questions have been repeatedly asked in the past, although the case background was different. Some poorly performing candidates were not able to tell the difference between business risks in general and the risk of material misstatement in financial statements and copied a lot of irrelevant materials from the learning pack or the suggested solutions of past papers, even though the question explicitly excluded such risks. Some concentrated too narrowly on financial risks such as currency risks, although such risks were not apparent in the case.Question 1(f) – 8 marksThis question required candidates to recommend non-financial measures for the performance in controlling business risks. Candidates’ performance in this question was very poor. No candidates scored full marks and a high proportion of candidates scored very low marks. Not many really understood the requirement of the question. Many candidates misread the question, interpreting it as requiring recommendations for solutions, or “measures”, to control the risks. Not many candidates gave the correct answer by recommending appropriate non-financial performance “measurement” as required by the question.Question 1(g) – 6 marksThis question required candidates to recommend other internal (management) controls to address the entity’s business risk in addition to those non-financial performance measurements required in question 1(f). Candidates’ performance in this question was again very poor, probably consequential to their misunderstanding of the requirement in question 1(f). Many candidates did not attempt this question, probably because they failed to differentiate this question from question 1(f). Some candidates copied a lot of irrelevant materials from auditing standards, even though the question was on internal (management) controls.Question 1(h) – 7 marksThis question required candidates to advise whether the entity should change its functional currency and presentation currency. Candidates’ performance in this question was good. Many candidates demonstrated a good understanding of the relevant financial reporting standard and had applied it correctly in the case. Poorly performing candidates just could not identity the issue even in this straightforward case.Question 1(i) – 8 marksThis question required candidates to advise whether two parties were related to the entity. Performance in this question was average. While many candidates were able to explain the relationship correctly, not many were able to conclude that there were actually no transactions between the entity and these parties. Many poorly performing candidates copied pages of definitions and disclosure requirements without any attempt to identify the relevant requirements or apply them to the case, resulting in zero or a low score.Question 1(j) – 7 marksThis question required candidates to critically evaluate the revenue policy of the entity. Performance in this question was below average. While many candidates were able to evaluate the policy in general, not many were able to identify possible problems when the policy was applied to overseas sales. Many poorly performing candidates copied pages of recognition requirements without any attempt to identify the relevant requirements or apply them to the case, resulting in zero or a low score.Question 1(k) – 8 marksThe question required candidates to discuss the ethical issues of a professional accountant in business having a financial interest in the company that employs him/her. Many candidates were able to point out self-interest threats as the issue and made a lot of references to the principles under the Code of Ethics. However, only a few good performing candidates were able to demonstrate good application of the principles by critically analysing the threats and proposing appropriate safeguards.(II) SECTION B – ESSAY QUESTIONSGeneral CommentsThe overall performance of candidates was consistent with the past diets. The case in this paper was not a lengthy case but required the candidates to have a thorough understanding of the business operations that were relevant to the tax issues as described in the case in order to provide satisfactory answers. In general, candidates performed well in question 2(a) and question 3. The candidates who did not perform well were those who did not take time to grasp the given facts which is the requirement in final examinations.Specific CommentsQuestion 2(a) – 6 marksQuestion 2 was on transfer pricing issues in Hong Kong profits tax and part (a) was a question requiring candidates to explain what triggered the IRD’s challenge on the pricing arrangement between the taxpayer and its overseas parent company as well as the relevant legal authorities. Many candidates could mention low profit margin as a cause but not the functions and risks taken by the parties to the trading transaction.The second part required candidates to identify section 16(1), section 20(2) and the general anti-avoidance provisions in section 61 and section 61A. Most candidates could identify section 20(2). Some candidates could mention section 61 and/or section 61A. However, the fact that the IRD can disallow the deduction simply by applying section 16(1) was rarely mentioned by candidates.Question 2(b) – 13 marksThe performance on this part was less than satisfactory, partly because this part required candidates to do a comprehensive analysis of the tax consequences if the IRD could successfully challenge the excessive purchase costs. Candidates who did not do well in (a) did not perform well in this part. The part related to section 20(2) was answered well but many candidates were unable to provide a good discussion regarding the application of section 61 and section 61A. Very few candidates mentioned the possible penalties under section 82A.Question 2(c) – 3 marksThe performance on this part was similar to part (b). The answer for this part required the candidates to explain the defence that could be raised by the taxpayer against the challenges raised by the IRD in part (a). Candidates who could use the causes they identified in part (a) did well. Although some candidates did well in (a), they were unable to capitalize on what they had done in answering this part.Question 3 – 3 marksThis part dealt with the salaries tax issues of a Hong Kong office. Many candidates did well probably because this topic has been examined several times in the past.。
2008ck100会计英语讲义
讲义2008年注册会计师全国统一考试会计英语辅导讲义一、相关背景1、2008年注册会计师全国统一考试将在会计、审计和财务成本管理三门课程中增加10分的英语附加题。
这一变化主要是为了满足中国经济和行业发展对国际型人才的需要。
财政部CPA考试委员会将逐步推广英语附加题到其他考试科目中。
据此看来，在CPA各科考试中加重英语的分量将是一个趋势。
2、增加英语附加题后，会计、审计和财务成本管理的总分为110分，及格分仍为60分，总体考试时间不变。
英语附加题要求用英语回答，所以考生朋友们一定要根据本人英语水平选择作答。
有一定英语基础（大学英语四、六级水平，掌握一定的财经英语词汇），打算选答英语附加题的考生朋友更应该合理规划和安排时间，在考试时认真阅读试卷首页的特别提示和答题导语，争取尽可能多的在英语附加题上拿分。
英语基础较差的考生朋友不要慌乱，心态要放平和，力争前面的100分，如果时间允许可尝试做英语附加题。
二、可能的题型因为只有10分的英语题，所以估计出客观题的可能性不大，很有可能是主观题，并且是专业题。
题型可能包括：名词解释，英汉互译，问答（理论性的或业务性的）。
根据2007年的英语附加题判断，今年的会计英语附加题仍有很大可能是业务核算题。
三、会计英语讲解Accounting一、主要专业术语和基本概念1. Financial reporting（财务报告）includes not only financial statements but also other means of communicating information that relates, directly or indirectly, to the information provided by a business enterpr ise’s accounting system----that is, information about an enterprise’s resources, obligations, earnings, etc.2. Objectives of financial reporting：财务报告的目标Financial reporting should：(1) Provide information that helps in making investment and credit decisions.(2) Provide information that enables assessing future cash flows.(3) Provide information that enables users to learn about economic resources, claims against those resources, and changes in them.3. Basic accounting assumptions 基本会计假设(1) Economic entity assumption 会计主体假设This assumption simply says that the business and the owner of the businessare two separate legal and economic entities. Each entity should account and report its own financial activities.(2) Going concern assumption 持续经营假设This assumption states that the enterprise will continue in operation long enough to carry out its existing objectives.This assumption enables accountants to make estimates about asset lives and how transactions might be amortized over time.This assumption enables an accountant to use accrual accounting which records accrual and deferral entries as of each balance sheet date. (3) Time period assumption 会计分期假设This assumption assumes that the economic life of a business can be divided into artificial time periods.The most typical time segment = Calendar YearNext most typical time segment = Fiscal Year(4) Monetary unit assumption 货币计量假设This assumption states that only transaction data that can be expressed in terms of money be included in the accounting records, and the unit of measure remains relatively constant over time in terms of purchasing power. In essence, this assumption disregards the effects of inflation or deflation in the economy in which the entity operates.This assumption provides support for the "Historical Cost" principle.4. Accrual-basis accounting 权责发生制会计5. Qualitative characteristics 会计信息质量特征(1) Reliability 可靠性For accounting information to be reliable, it must be dependable and trustworthy.Accounting information is reliable to the extent that it is：Verifiable：means that information has been objectively determined, arrived at, or created. More than one person could consider the facts of a situation and reach a similar conclusion.Representationally faithful：that something is what it is represented to be. For example, if a machine is listed as a fixed asset on the balance sheet, then the company can prove that the machine exists, is owned by the company, is in working condition, and is currently being used to support the revenue generating activities of the company.Neutral：means that information is presented in accordance with generally accepted accounting principles and practices, and without bias.(2) Relevance 相关性Relevant information is capable of making a difference in the decisions of users by helping them to evaluate the potential effects of past, present,or future transactions or other events on future cash flows (predictive value) or to confirm or correct their previous evaluations (confirmatory value).(3) Understandability 可理解性Understandability is the quality of information that enables users who have a reasonable knowledge of business and economic activities and financial reporting, and who study the information with reasonable diligence, to comprehend its meaning.(4) Comparability 可比性Comparability：suggests that accounting information that has been measured and reported in a similar manner by different enterprises should be capable of being compared because each of the enterprises is applying the same generally accepted accounting principles and practices. Consistency：suggests that an entity has used the same accounting principle or practice from one period to another, therefore, if the dollar amount reported for a category is different from one period to the next, then chances are that the difference is due to a change like an increase or decrease in sales volume rather than being due to a change in the method of calculating the dollar amount.(5) Substance over form 实质重于形式Substance over form emphasizes the economic substance of an event even though its legal form may provide a different result.It requires that business enterprise should perform accounting recognition, measurement and reporting in accordance with the economic substance rather than the legal form of an event or transaction.(6) Materiality 重要性Information is material if its omission or misstatement could influence the resource allocation decisions that users make on the basis of an entity’s financial report. Materiality depends on the nature and amount of the item judged in the particular circumstances of its omission or misstatement. Deciding when an amount is material in relation to other amounts is a matter of judgment and professional expertise.(7) Conservatism 谨慎性Conservatism dictates that when in doubt, choose the method that will be least likely to overstate assets and income, and understate liabilities and expenses.(8) Timeliness 及时性Timeliness means having information available to decision makers before it loses its capacity to influence decisions. If information becomes available only after the time that a decision must be made, it has no capacity to influence that decision and thus lacks relevance.6. Basic accounting elements 基本会计要素(1) Asset 资产An asset is a resource that is owned or controlled by an enterprise as a result of past transactions or events and is expected to generate economic benefits to the enterprise.(2) Liability 负债A liability is a present obligation arising from past transactions or events which are expected to give rise to an outflow of economic benefits from the enterprise.A present obligation is a duty committed by the enterprise under current circumstances. Obligations that will result from the occurrence of future transactions or events are not present obligations and shall not be recognized as liabilities.(3) owners’ equity 所有者权益Owners’ equity is the residual interest in the assets of an enterprise after deducting all its liabilities.Owners’ equity of a company is also known as shareholders’ equity. (4) Revenue 收入Revenue is the gross inflow of economic benefits derived from the course of ordinary activities that result in increases in equity, other than those relating to contributions from owners.(5) Expense 费用Expenses are the gross outflow of economic benefits resulted from the course of ordinary ac tivities that result in decreases in owners’equity, other than those relating to appropriations of profits to owners.(6) Profit 利润Profit is the operating result of an enterprise over a specific accounting period. Profit includes the net amount of revenue after deducting expenses, gains and losses directly recognized in profit of the current period, etc.7. Five measurement attributes 会计计量属性(1) Historical cost 历史成本Assets are recorded at the amount of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the amount of proceeds or assets received in exchange for the present obligation, or the amount payable under contract for assuming the present obligation, or at the amount of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business.(2) Current replacement cost 现时重置成本Assets are carried at the amount of cash or cash equivalents that would have to be paid if a same or similar asset was acquired currently.Liabilities are carried at the amount of cash or cash equivalents that would be currently required to settle the obligation.(3) Net realizable value 可实现净值Assets are carried at the amount of cash or cash equivalents that could be obtained by selling the asset in the ordinary course of business, less the estimated costs of completion, the estimated selling costs and related tax payments.(4) Present value 现值Assets are carried at the present discounted value of the future net cash inflows that the item is expected to generate from its continuing use and ultimate disposal. Liabilities are carried at the present discounted value of the future net cash outflows that are expected to be required to settle the liabilities within the expected settlement period.(5) Fair value 公允价值Assets and liabilities are carried at the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.8. Financial statements 财务报表(1) Balance sheet 资产负债表A balance sheet is an accounting statement that reflects the financial position of an enterprise at a specific date.(2) Income statement 损益表An income statement is an accounting statement that reflects the operating results of an enterprise for a certain accounting period.(3) Statement of cash flows 现金流量表A cash flow statement is an accounting statement that reflects the inflows and outflows of cash and cash equivalents of an enterprise for a certain accounting period.(4) Statement of changes in owners’equity 所有者权益变动表A statement of changes in owners’equity reports the changes i n owners’equity for a specific period of time.(5) Notes to financial statements 财务报表附注Notes to the accounting statements are further explanations of items presented in the accounting statements, and explanations of items not presented in the accounting statements, etc.9. Accounting entry 会计分录Debit：CashCredit：Common Stock10. Basic accounting equation 基本会计等式Assets = Liabilities + owners’ equity11. List of present and potential users of financial information 财务信息的使用者investors, creditors, employees, suppliers, customers, and governmental agencies.第二章货币资金cash库存现金、银行存款Cash in hand/cash in bank银行汇票、银行本票、商业汇票、商业承兑汇票、银行承兑汇票Bank draft/bank promissory note/commercial draft/commercial acceptance draft/bank acceptance draft支票、信用卡、汇兑、委托收款、托收承付、信用证Check/credit card/remittance/ Consignment Collection/collection with acceptance/lines of credit现金溢余和短缺：cash over and short第三章金融资产financial assets1．金融资产：financial assets2．金融资产初始确认时的分类：The way in which an instrument is measured subsequently depends on its classification. There are four categories：以公允价值计量且其变动计入当期损益的金融资产：可进一步分为交易性金融资产（financial assets held for trading）和指定为以公允价值计量且其变动计入当期损益的金融资产（designated financial assets at fair value through profit or loss）Financial assets and liabilities at fair value through profit or loss 持有至到期投资Held to maturity investments：have fixed or determinable payments and fixed maturity. The company must have the positive intention and ability to hold them to maturity. Equity instruments cannot be held to maturity investments.贷款和应收款项Loans and receivables：have fixed or determinable payments and are not quoted in an active market.可供出售的金融资产Available-for-sale financial assets：are all items that do not fall into the other categories.3．金融资产的初始计量：the initial measurement of financial assetsAll financial assets and liabilities should be measured at fair value when they are first recognized. This is normally their cost (the fair valueof the consideration given or received). Fair value includes transaction costs unless the instrument is classified as ‘at fair value through profit or loss’, in which case transaction costs are recognized in the income statement.4．金融资产的后续计量：subsequent measurement of financial assetsAfter first recognition, most financial assets are measured at fair value. Exceptions are held to maturity investments and loans and receivables, which are measured at amortized cost, using the effective interest rate method.5. The way in which gains and losses on remeasurement are treated also depends upon the classification of the instruments. Gains and losses relating to instruments at fair value through profit or loss are recognized in the income statement, even if they are unrealized. Gains and losses relating to changes in the fair value of available for sale financial assets are recognized in equity and recycled to the income statement when the asset is sold. Changes in amortized cost are recognized in the income statement.6．金融资产的减值：the impairment of financial assetsAt each balance sheet date, an entity should assess whether there is any objective evidence that a financial asset or group of assets is impaired. Indications of impairment include：(1) significant financial difficultyof the issuer; (2) the probability that the borrower will enter bankruptcy;(3) a default in interest or principal payments; or (4) (for available for sale financial assets) a significant and prolonged decline in fair value below cost.The recognition of the impairment of financial assets：(1) For financial assets carried at amortized cost (held to maturity investments and loans and receivables) the impairment loss is the difference between the asset’s carrying amount and its recoverable amount. The asset’s recoverable amount is the present value of estimated future cash flows, discounted at the financial instrument’s original effective interest rate.(2) For financial assets carried at cost because their fair value cannot be reliably measured, the impairment loss is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial instrument.(3) For available for sale financial assets, the impairment loss is the difference between the acquisition cost (net of any principal repayment and amortization) and current fair value (for equity instruments) or recoverable amount (for debt instruments).(4) Assets at fair value through profit or loss are not subject toimpairment testing, because changes in fair value are automatically recognized immediately in profit or loss.Example：Ellesmere Co entered into the following transactions during the year ended 31 December 20X3：(1) Entered into a speculative interest rate option costing $10,000 on January 20X3 to borrow $6,000,000 from AB Bank commencing 31 March 20X5 for 6 months at 4%. The value of the option at 31 December 20X3 was $15,250.(2) Purchased 6% debentures in FG Co on 1 January 20X3 (their issue date) for $150,000 as an investment. Ellesmere Co intends to hold the debentures until their redemption at a premium in 5 year’s t ime. The effective rate of interest of the bond is 8.0%.(3) Purchased 50,000 shares in ST Co on 1 July 20X3 for $3.50 each as an investment. The share price on 31 December 20X3 was $3.75.RequiredShow the accounting treatment and relevant extracts from t he financial statements for the year ended 31 December 20X3. Ellesmere Co only designates financial assets as at fair value through profit or loss where this is unavoidable.Notes：1. Interest rate option：this is a derivative（衍生金融工具）and so it must be treated as at fair value through profit or loss.Initial measurement (at cost)Dr. Financial asset 10,000Cr. Cash 10,000At 31.12.20X3 (re-measured to fair value)Dr. Financial asset 15,250Cr. Cash 15,2502. Debentures：on the basis of the information provided, this can be treated as a held-to-maturity investment.Initial measurement (at cost)Dr. Financial asset 150,000Cr. Cash 150,000At 31.12.20X3 (amortized cost)Dr. F inancial asset (150,000×8%) 12,000Cr. Finance income 12,000Dr. Cash (150,000×6%) 9,000Cr. Financial asset 9,0003. Shares：these are treated as an available for sale financial asset . Initial measurement (at cost)Dr. Financial asset (50,000×3.50) 175,000Cr. Cash 175,000At 31.12.20X3 (re-measured to fair value)Dr. Financial asset (50,000×3.75-175,000) 12,500Cr. Equity 12,500第四章存货Inventories1．存货的确认the recognition of inventories2．存货的初始计量the initial measurement of inventoriesInventories should be measured at cost when they are first recognized. Cost is the cost of bringing items of inventory to their present location and condition (cost of purchase and costs of conversion).Cost of purchase comprises purchase price including import du ties, transport and handling costs and any other directly attributable costs, less trade discounts, rebates and subsidies.Cost of conversion comprises (1) costs which are specifically attributable to units of production, e.g. direct labor, direct expenses and subcontracted work; (2) production overheads; (3) other overheads, if any, attributable in the particular circumstances of the business to bringing the product or service to its present location and condition. 3．发出存货的计量Four methods：(1) first-in, first-out; (2) moving weighted average cost;(3) weighted average cost; (4) actual unit cost (specific identification) The same method of arriving at cost should be used for all inventories having similar nature and use to the enterprise.4．期末存货的计量the year-end measurement of inventoriesEnding inventories should be valued at the lower of cost and net realizable value.Net realizable value is the actual or estimating selling price less all costs to complete and all costs necessary to make the sale (i.e. all c osts to be incurred in marketing, selling and distribution).第五章长期股权投资long-term equity investment1．长期股权投资的初始计量initial measurementLong-term equity investments should be measured at initial investment cost when they are first recognized. The determination of the initial investment cost depends on two different circumstances which are business combinations and non business combinations.Long-term equity investment comprises (1) investment in subsidiaries;(2) investments in associates; (3) investments in joint ventures; and (4) ordinary equity investments2．长期股权投资的后续计量subsequent measurementCost method（成本法）Equity method （权益法）第七章无形资产Intangible AssetsIntangible assets are business assets that have no physical form. There are two types of intangible assets：those that are purchased and those that are internally generated. R&D costs fall into the category of internally-generated intangible assets, and are therefore subject to specific recognition criteria.RecognitionAn intangible asset is to be recognized if, and only if, the following criteria are met：●it is pro bable that future economic benefits from the asset will flow to the entity●the cost of the asset can be reliably measured.Research phaseIt is impossible to demonstrate whether or not a product or service at the research stage will generate any probable future economic benefit. As a result, all expenditure incurred at the research stage should be written off to the income statement as an expense when incurred, and will never be capitalised as an intangible asset.Development phaseAn intangible asset arising from development must be capitalised if an entity can demonstrate all of the following criteria：●the technical feasibility（技术可行性）of completing the intangible asset (so that it will be available for use or sale)●intention to complete and use or sell the asset●ability to use or sell the asset●existence of a market or, if to be used internally, th e usefulness of the asset●availability of adequate technical, financial, and other resources to complete the asset●the cost of the asset can be measured reliably.Treatment of capitalized development costsOnce development costs have been capitalized（资本化）, the asset should be amortised（摊销）in accordance with the accruals concept（应计制）over its finite life（有限寿命）. Amortisation must only begin when commercial production has commenced (hence matching the income and expenditure to the period（使当期收入与支出配比）in which it relates). Each development project must be reviewed at the end of each accounting period to ensure that the recognition criteria are still met. If the criteria are no longer met, then the previously capitalised costs must be written off to the income statement immediately.Example：Forkbender Co develops and manufactures exotic cutlery and has the following projects in hand.Project 1 was originally expected to be highly profitable but this is now in doubt, since the scientist in charge of the project is now behind schedule, with the result that competitors are gaining ground.Project 2：commercial production started during the year. Sales were20,000 units in 20X8 and future sales are expec ted to be：20X9 30,000 units; 20Y0 60,000 units; 20Y1 40,000 units; 20Y2 30,000 units. There are no sales expected after 20Y2.Project 3：these costs relate to a new project, which meets the criteria for deferral of expenditure and which is expected to las t for three years. Project 4 is another new project, involving the development of a ‘loss leader’, expected to raise the level of future sales.The company’s policy is to defer development costs, where permitted. Expenditure carried forward is written off evenly over the expected sales life of projects, starting in the first year of sale.RequiredShow how the above projects should be treated in the accounting statements of Forkbender Co for the year ended 31 December 20X8.AnswerProject 1 expenditure, including that relating to previous years, should all be written off in 20X8, as there is now considerable doubt as to the profitability of the project.Since commercial production has started under project 2 the expenditure previously deferred should now be amortized.Project 3：the development costs may be deferred.Since project 4 is not expected to be profitable its development costs should not be deferred.Notes：第九章资产减值Impairment of AssetsThe purpose of an impairment review（减值测试）is to ensure that tangible and intangible non-current/fixed assets（有形和无形非流动资产）are not carried in the accounts at a figure in excess of their recoverable amount （可收回金额）. Goodwill（商誉）and indefinite-lived intangible assets have to be annually reviewed for impairment. Other non-current/fixed assets have to be reviewed for impairment only when there is an indicator that carrying amounts may not be recoverable, ie carrying value > recoverable amount, where recoverable amount is the higher of value in use (VIU) （使用价值）and net selling price (NSP)（销售净值）. Circumstances that trigger the need for a review may arise from external or internal sources. 对资产减值迹象的判断可根据企业内部信息和外部信息。
香港注册会计师公会综合考试考生答题表现Fpe_Dec08_Paper_II_Com
Qualification Programme Examination Panelists’ ReportFinal Examination(December 2008 Session)Paper II(The main purpose of the following report is to summarise candidates’ common weaknesses and make recommendations to help future candidates improve their examination performance.)(I) Section A – Case QuestionsGeneral CommentsCandidates’ overall performance in Section A of Paper II was unsatisfactory.Candidates were weak in analysing technical issues, especially the segment reporting under HKFRS 8. They discussed consolidation too much. Most of them were not familiar with the accounting treatment of interest rate swap and hedge accounting.Specific CommentsQuestion 1(a) – 8 marksThis question required candidates to discuss the reason for the elimination of inter-segment sales and addition of unallocated corporate assets in reconciling the segment revenue and assets with the consolidated figures of the Group. Candidates’ performance was not satisfactory. In general, candidates could not apply HKFRS 8 effectively and most of them focused only on the consolidation issues. Most of the candidates could not identify the fact that HKFRS 8 required a management approach to measuring segment information and therefore any arbitrary adjustments and allocations solely for external reporting purposes were not required.Question 1(b) – 7 marksThis question required candidates to discuss how the Group’s investment in the real estate investment trust (REIT) and the disposal of the Group’s shares should be accounted for in the consolidated balance sheet. Candidates’ performance was unsatisfactory. Typically, candidates could not draw the right conclusion and most of them argued that REIT should be consolidated even though the Group actually could not control the REIT.Question 1(c) – 5 marksThis question required candidates to explain how the unit-holders’ fund and the distributions to unit-holders should be accounted for in the financial statements of the REIT. Candidates’ performance was satisfactory. Most of the candidates could identify the unit fund as a financial liability. However, many candidates focused only on the definition of financial liability without applying it to the case.Question 1(d) – 10 marksThis question required candidates to describe five principal risks relating to the REIT’s organisation and operations. Candidates’ performance was satisfactory. However, many candidates only quoted the general risk factors without relating them to the special feature of the REIT.Question 1(e) – 4 marksThis question required candidates to discuss the financial implications of the issue of convertible bonds. Candidates’ performance was barely satisfactory. Some candidates were confused: the question asked for the discussion of the financial implications, but they only discussed accounting treatments. Most candidates were weak in analysing the structure and the special features of convertible bonds.Question 1(f) – 6 marksThis question required candidates to discuss the financial implications of an interest rate swap. Candidates’ performance was not satisfactory. Most candidates could only quote the simple arrangement of an interest rate swap while the function and objective of arranging the swap were not well analysed.Question 1(g) – 10 marksThis question required candidates to discuss the accounting treatment of the interest rate swap and the resulting gain or loss on its subsequent measurement. Candidates’ performance was not satisfactory. Candidates were weak in analysing the accounting treatments of the interest rate swap. Most of them did not consider the various treatments of the swap under different scenarios.Question 2(a) – 15 marksThe question required candidates to propose the audit approach for rental income, and in particular, discuss the impact of the REN database on the audit procedures. Many candidates were able to correctly propose the use of a combined approach (test of control and substantive procedures), but not many candidates were able to point out that one of the main reasons for this approach is that there is a presumption under auditing standards that revenue recognition has a higher risk of misstatement due to fraud.Many candidates discussed in detail the definition of the relevant financial statement assertions (e.g. accuracy, completeness) but this was not required by the question and hence low marks were awarded for this.Candidates generally were able to propose appropriate analytical procedures and test of details procedures. However, there were often limited discussions on the test of computer general controls (e.g. access controls, segregation of duties, development and maintenance of the REN database). Some candidates were able to propose the use of CAAT, but not many were able to explain the main reason for this (the fact that rental information was contained in one place and organised in a consistent manner) and how it could be applied specifically.Question 2(b) – 5 marksThe question required candidates to discuss what was needed to be communicated to the audit committee at the audit planning and completion stages. Some good performing candidates were able to properly list out the matters that were required to be communicated to those charged with governance (including the audit committee) under the auditing standards. However, many candidates were unable to distinguish the difference between those charged with governance and management, and proposed to communicate matters that were not necessarily of governance interest, but of a day-to-day project management nature (e.g. schedule request list).Question 2(c) – 5 marksThe question required candidates to explain the difference between a review engagement and an audit. Candidates generally performed satisfactorily. Most candidates were able to explain the difference. Often the reason for not being able to score a higher mark was due to candidates giving too few explanations.(II) Section B – Essay QuestionsGeneral CommentsThe overall performance of candidates in paper II was not as good as that in paper I.The case was on assets restructuring in an IPO project and the tax issues were those related to transactions in the restructuring, including stamp duty. Although diagrams had been provided in the case, some candidates were unable to have a thorough analysis of the case information, and, as a result, unable to identify ALL the tax issues in the restructuring transactions, especially those related to stamp duty. This partly contributed to the overall unsatisfactory results.Specific CommentsQuestion 3(a)(i) – 17 marksThis question required comprehensive advice on the tax issues, including stamp duty, of the restructuring transactions. The results in this part were not satisfactory. Not many candidates could provide a thorough analysis. Some could not identify the trading profits (vs capital gain) issue in the disposal of assets (property and shares) in the restructuring transactions. Many candidates ignored the stamp duty transactions and only a few could mention the tax issue related to the change of intention or compute the balancing charge on the property disposed. Because the question involved a few transactions, a well-structured presentation could help the candidates to organize their thoughts and answers. Only very few candidates took this approach.Question 3(a)(ii) – 3 marks and Question 3(a)(iii) – 2 marksThese two questions were related to the ethical issues in tax engagements. One was related to the engagement team (and the firm) and the other was related to the individual member of the team. Answers to both parts were not satisfactory. Candidates appeared to be unprepared for questions on ethical issues related to taxation. Of the issues related to the engagement, many candidates mentioned the “self-review” threat which was obviously not important in a tax advisory engagement alone. This was probably because thought was not given to the issues.Question 3(b) – 3 marksThis question was on the computation of commercial building allowances (CBA) for a second hand building. This is a common issue in practice. Although many candidates could identify that commercial building allowances should be calculated, not many candidates could demonstrate their understanding of the provisions related to the computation of CBA for second hand building. Some candidates incorrectly used 4% of the original cost to compute the allowance and some used the cost including the land cost. Lack of preparation in this area might have contributed towards the unsatisfactory results for this question.。
CLP-HongKong
ImportanceFrom the financial statements, we figures out these data.Income statementBalance sheetCompared with 2011From the forms mentioned, we know that Hong Kong takes a significant proportion of CLP no matter on the investment (from the fixed asset, total asset and total liability ratio can expresses this information), profit (from the Income Statement, the earnings and profit ratios are extremely high compared with the alternative segments).From the historyHong Kong is the headquarter of CLP.From 2008 to 2012, earnings of the electricity business (the main business of CLP) in Hong Kong maintain a percentage exceeds at least 50% of the total earnings while the earnings of the energy business of Australia maintains nearly quarter of Hong Kong’s performance and other investments / operations only takes a minor proportion of the total earnings.From the two points mentioned above, we have drawn the conclusion that Hong Kong owns an important position in CLP.PerformanceIn 2012, the earnings from Hong Kong electricity business were HK$6,654 million, a 5% increase from HK%6,339 million in 2011. this increase was due to the permitted return from a higher level of average net fixed assets over the year, partially offset by the higher interest costs on increased borrowings for the financing of fixed assets.StrategiesMaintain strategyThere two reasons for the maintain strategy:The increasing market occupancy80% Hong Kong residuals are served by CLP to continue their daily life and business, and it is still raising with a comparable low speed.The growth of the electricity demand in Hong KongHong Kong is facing a prosperous global economic environment, a large demand of electricity with a high speed growth to support their development is generated by the residential, commercial, infrastructure & public services and manufacturing industries. It is certainly favorable for CLP’s development in the future.EnvironmentThe local sales will be influenced by the external economic environment (risk)From the report we figure out that the external economic environment has affected the manufacturing and commercial industry of Hong Kong, and it leads to a negative impact on CLP’s salesSoC (opportunity)Although there are some limits on the tariff and capital investment, it is also an opportunity once the government agrees on the tariff and investments; it means a support governmental segment.The SoC also brings to the interim review, and it provides an opportunity for CLP to put forward the unreasonable aspects during the implement of SoC.MOU (opportunity)It can provide several steady and dependable gas suppliers to CLP.GSA (opportunity)With GSA, CLP can freely invest the supply facilities to enhance provide a steady and dependable gas supply.Air quality by 2020 (opportunity)Although CLP has to invest a large amount capital to meet this target, it is obviously a turning point for CLP stepping into a high level with wider prospective.Fukushima event (risk)Influenced by this event, CLP has to make great effort on the propagating education of nuclear energy.Weather (risk)The local sales will be influenced by the weather, such as the hot summer, hurricane, etc.Data centers (opportunity)It will stimulate a great growth of demand and raise the local sales by a wide margin.Stakeholders own a strict attitude (risk)CLP has to consider the stakeholders during determinations.Daya bay (risk)It is a large electricity supplier of Hong Kong, meanwhile, it is under gasdepletion and it will cause a negative impact on Hong Kong.ReliabilityThe customers in Hong Kong require a reliable electricity supply, CLP has to make its great effort to meet this requirement.InfluenceAimed at the elements mentioned, CLP will implement these specific strategies in 2013.●Continuing to monitor and manage the gas supply form the existing Yacheng gas field and evaluate the gas supply options outlined in the MOU;●Ensuring the safe and reliable operation of Hong Kong Branch Line Project, and completing all gas receiving infrastructure and plant modification works on schedule to accept deliveries of new gas supplies;●Securing HKSAR Government approval for CLP’ Development Plan covering the period from 2014 to September 2018;●Engaging actively with the HKSAR Government, key stakeholders and the wider community on the SoC Interim Review;●Managing operating costs amidst volatile international fuel prices and rising local labor costs, so as to minimize tariff increases for customers;●Stepping up efforts to promote energy efficiency through public education and the provision of energy efficiency related services;●Exploring the options for importing additional nuclear energy or providing additional gas generation capacity in Hong Kong, both to meet increasing electricity demand and to ensure that this is done in line with any decision by the Government regarding the role of nuclear energy in Hong Kong;●Enhancing stakeholders engagement activities and communication plans on nuclear safety issues to promote an informed debate on the future energy mix for Hong Kong;●Engaging actively with the HKSAR Government on a practical plan for meeting proposed climate change goals and achieving air quality objectives, as well as starting to plan and pursue the major infrastructure developments in CLP’s business which be needed if these policies are to be successfully implemented on time;●Take forward innovative initiatives.(下面还有几条是long-term的strategy，直接就可以抄书上的，第44页，最后几行。
HongKongCompantMMA_sample B (long form)
Explanatory Note for Sample BMEMORANDUM & ARTICLES OF ASSOCIATION FORPRIVATE COMPANY LIMITED BY SHARESSample B is a Long Form Memorandum & Articles of Association for private company limited by shares, based on the Memorandum & Articles of Association commonly adopted by companies engaging company secretarial services providers in Hong Kong.In Sample B, the object clause is removed and the fifth paragraph of the Memorandum of Association of the Sample is different from the corresponding paragraph in the Form of Memorandum of Association of a company limited by shares in Table B to the Companies Ordinance (Cap.32) in that the power of the company with regard to share capital is stated in a more exemplified manner.As to the differences between the Articles of Association in Sample B and those in Table A of the First Schedule to the Companies Ordinance (Cap. 32) (i.e. Sample A), the major ones are as follows:-1)Provisions on the following matters are not included in Sample B:-regulations on conversion of shares into stock and vice versa (regulations41 to 44 of Table A);instrument of transfer relating to more than one class of shares (regulation 25(c) of TableA); anddirectors’ retirement retire by rotation (regulations 91 to 96 of Table A).2)Provisions on the following matters not appearing in “Table A” are included in Sample B:-members’ resolution in writing (regulations 52 & 53 of Sample B);alternate director (regulations 82 & 83 of Sample B);reserve director (regulation 84 of Sample B);written record of decision of sole director (regulation 85 of Sample B);participation in directors’ meeting need not be in the same place (regulation 99 of SampleB);no rights to dividend before registration and forfeiture of unclaimed dividend (regulations 121 & 122 of Sample B); andthe manner and mode of giving notices to shareholders through a company’s website (regulations 130 & 134 of Sample B). (These regulations are based on the electronic andwebsite communications provision introduced under the Companies (Amendment) Ordinance 2010.)Companies may adopt Sample B as they see fit. Companies or their officers should consult their professional advisors on any matter which may affect them relating to or arising out of the adoption of the Memorandum and Articles of Association in Sample B.THE COMPANIES ORDINANCE (CHAPTER 32) Private Company Limited by Shares MEMORANDUM OF ASSOCIATION OFFirst:The name of the company isSecond: The registered office of the company will be situated in Hong Kong.Third: The liability of the members is limited.Fourth:Subject to the provisions of the Companies Ordinance (Cap.32), the company has the power to increase or reduce the said capital and to issue any part of its capital, original or increased, with or without preference, priority or special privileges, or subject to any postponement of rights or to any conditions or restrictions and with power to modify or abrogate the rights attaching to any or all shares of the company.“ENGLISH COMPANY NAME 公司中文名稱” [NAME OF THE COMPANY] The share capital of the company is [HKD10,000] divided into [10,000] [Ordinary] share(s) of [HKD1] each.I/WE, the undersigned whose name(s), address(es) and description(s) is/are given below, wish to form a company, in pursuance of this memorandum of association, and I/we respectively agree to take the number of share(s) in the capital of the company set opposite my/our respective name(s). Name(s), Address(es) and Description(s) of Founder Members Number of Share(s) Taken by EachFounder MemberTotal number of share(s) taken:[ORDINARY]:[2][ORDINARY]:[1][English name (Chinese name)] [ORDINARY]:[1][English name (Chinese name)] [Address] [Address] [Description / Occupation] [Description / Occupation]THE COMPANIES ORDINANCE (CHAPTER 32)Regulations for Management of a Private Company Limited by SharesARTICLES OF ASSOCIATIONOF[NAME OF THE COMPANY]Interpretation1. In these regulations-"Ordinance" (本條例) means the Companies Ordinance (Cap 32);"seal" (印章) means the common seal of the company;"secretary" (秘書) means any person appointed to perform the duties of the secretary of the company.Expressions used in these regulations referring to writing shall, unless the contrary intention appears, be construed as including references to printing, lithography, photography and other modes of representing or reproducing words in a visible form.Wherever any provision of these regulations (except a provision for the appointment of a proxy) requires that a communication as between the company, its directors or members be effected in writing, the requirement may be satisfied by the communication being given in the form of an electronic record if the person to whom the communication is given consents to it being given to him in that form.Wherever any provision of these regulations requires that a meeting of the company, its directors, members or committee members be held, the requirement may be satisfied by the meeting being held by such lawful electronic means or in such other lawful manner as may be agreed by the company in general meeting.Unless the context otherwise requires, words or expressions used in these regulations shall have the same meaning as in the Ordinance or any statutory modification thereof in force at the date at which these regulations become binding on the company.The regulations in Table A in the First Schedule to the Ordinance shall not apply to the company.Private Company2. The company is a private company and accordingly-(a) the right to transfer shares is restricted in manner hereinafter prescribed;(b) the number of members of the company (exclusive of persons who are in theemployment of the company and of persons who, having been formerly in theemployment of the company, were while in such employment, and have continuedafter the determination of such employment, to be members of the company) islimited to 50. Provided that where 2 or more persons hold one or more shares inthe company jointly they shall, for the purpose of this regulation, be treated as asingle member; and(c) any invitation to the public to subscribe for any shares or debentures of thecompany is prohibited.Share Capital and Variation of RightsIssue of shares3.Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, any share in the company may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the company may from time to time by ordinary resolution determine.4. Subject to sections 49 to 49S of the Ordinance, the company may issue shares on the terms that they are, or at the option of the company or the holder of the shares are liable, to be redeemed on such terms and in such manner as may be provided by these regulations.5. If at any time the share capital is divided into different classes of shares, the rights attached to any class may, whether or not the company is being wound up, be varied with the consent in writing of the holders of three-fourths in nominal value of the issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class.6. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.7. The company may exercise the powers of paying commissions conferred by section 46 of the Ordinance, provided that the rate per cent or the amount of the commission paid or agreed to be paid shall be disclosed in the manner required by the said section, and the rate of the commission shall not exceed the rate of 10 per cent of the price at which the shares in respect whereof the same is paid are issued or an amount equal to 10 per cent of such price (as the case may be). Such commission may be satisfied by the payment of cash or the allotment of fully or partly paid shares or partly in one way and partly in the other. The company may also on any issue of shares pay such brokerage as may be lawful.8. Except as required by law, no person shall be recognized by the company as holding any share upon any trust, and the company shall not be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share or (except only as by these regulations or by law otherwise provided) any other rights in respect of any share, except an absolute right to the entirety thereof in the registered holder.9. Every person whose name is entered as a member in the register of members shall be entitled without payment to receive within 2 months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares, or several certificates, each for 1 or more of his shares, upon payment of $5 for every certificate after the first or such less sum as the directors shall from time to time determine. Every certificate shall be under the seal, or under the official seal kept by the company under section 73A of the Ordinance, and shall specify the shares to which it relates and the amount paid up thereon. Provided that in respect of a share or shares held jointly by several persons, the company shall not be bound to issue more than 1 certificate, and delivery of a certificate for a share to 1 of several joint holders shall be sufficient delivery to all such holders.10. If a share certificate be defaced, lost or destroyed, it may be renewed on payment of a fee of $5 or such less sum and on such terms (if any) as to evidence and indemnity and the payment of out-of-pocket expenses of the company of investigating evidence as the directors think fit.Lien11. The company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that share, and the company shall also have a first and paramount lien on all shares (other than fully paid shares) standing registered in the name of a single person for all moneys presently payable by him or his estate to the company; but the directors may at any time declare any share to be wholly or in part exempt from the provisions of this regulation. The company's lien, if any, on a share shall extend to all dividends payable thereon.12. The company may sell, in such manner as the directors think fit, any shares on which the company has a lien, but no sale shall be made unless a sum in respect of which the lien exists is presently payable, nor until the expiration of 14 days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share, or the person entitled thereto by reason of his death or bankruptcy.13. To give effect to any such sale, the directors may authorize some person to transfer the shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.14. The net proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.Calls on Shares15. The directors may from time to time make calls upon the members in respect of any moneys unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable at fixed times. Each member shall (subject to receiving at least 14 days' notice specifying the time or times and place of payment) pay to the company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the directors may determine.16. A call shall be deemed to have been made at the time when the resolution of the directors authorizing the call was passed and may be required to be paid by instalments.17. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.18. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment to the time of actual payment at such rate not exceeding 10 per cent per annum as the directors may determine, but the directors shall be at liberty to waive payment of such interest wholly or in part.19. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these regulations, be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case of non-payment, all the relevant provisions of these regulations as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.20. The directors may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment.21. The directors may, if they think fit, receive from any member willing to advance the same, all or any part of the moneys uncalled and unpaid upon any shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become payable) pay interest at such rate not exceeding (unless the company in general meeting shall otherwise direct) 8 per cent per annum, as may be agreed upon between the directors and the member paying such sum in advance.Transfer of Shares22. The instrument of transfer of any share shall be executed by or on behalf of the transferor and transferee, and the transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof.23. Subject to such of the restrictions of these regulations as may be applicable, any member may transfer all or any of his shares by instrument in writing in any usual or common form or any other form which the directors may approve.24. The directors may, in their absolute discretion and without assigning any reason therefor, decline to register any transfer of any share, whether or not it is a fully paid share.25. The directors may also decline to recognize any instrument of transfer if-(a) a fee of $5 or such lesser sum as the directors may from time to time require is notpaid to the company in respect of the transfer; and(b) the instrument of transfer is not accompanied by the certificate of the shares towhich it relates, or such other evidence as the directors may reasonably require toshow the right of the transferor to make the transfer.26. If the directors refuse to register a transfer, they shall within 2 months after the date on which the transfer was lodged with the company send to the transferor and transferee notice of the refusal.27. The registration of transfers may be suspended at such times and for such periods as the directors may from time to time determine, provided always that such registration shall not be suspended in any year for more than 30 days or, where the period for closing the register of members is extended in respect of that year under section 99(2)(a) of the Ordinance, for more than that extended period.28. The company shall be entitled to charge a fee not exceeding $5 on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, or other instrument against a member in the register of members.Transmission of Shares29. In case of the death of a member, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he was a sole holder, shall be the only persons recognized by the company as having any title to his interest in the shares; but nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.30. Any person becoming entitled to a share in consequence of the death or bankruptcy ofa member may, upon such evidence being produced, as may from time to time properly be required by the directors, and subject as hereinafter provided, elect either for himself to be registered as holder of the share, or to have some person nominated by him registered as the transferee thereof, but the directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that member before his death or bankruptcy, as the case may be.31. If the person so becoming entitled shall elect for himself to be registered, he shall deliver or send to the company a notice in writing signed by him stating that he so elects. If he shall elect to have another person registered he shall testify his election by executing to that person a transfer of the share. All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable toany such notice or transfer as aforesaid as if the death or bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by that member.32. A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the company.Provided always that the directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within 90 days, the directors may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.33. Any person to whom the right to any shares in the company has been transmitted by operation of law shall, if the directors refuse to register the transfer, be entitled to call on the directors to furnish within 28 days a statement of the reasons for the refusal.Forfeiture of Shares34. If a member fails to pay any call or instalment of a call on the day appointed for payment thereof, the directors may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.35. The notice shall name a further day (not earlier than the expiration of 14 days from the date of service of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed the shares in respect of which the call was made will be liable to be forfeited.36. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the directors to that effect.37. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the directors think fit, and at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the directors think fit.38. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to the company all moneys which, at the date of forfeiture, were payable by him to the company in respect of the shares, but his liability shall cease if and when the company shall have received payment in full of all such moneys in respect of the shares.39. A statutory declaration in writing that the declarant is a director or the secretary of the company, and that a share in the company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The company may receive the consideration, if any, given for the share on any sale or disposition thereof and may execute a transfer of the share in favourof the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.40. The provisions of these regulations as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a call duly made and notified.Alteration of Capital41. The company may from time to time by ordinary resolution increase the share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe.42. The company may by ordinary resolution-(a) consolidate and divide all or any of its share capital into shares of larger amountthan its existing shares;(b) sub-divide its existing shares, or any of them, into shares of smaller amount thanis fixed by the memorandum of association subject, nevertheless, to theprovisions of section 53(1)(d) of the Ordinance;(c) cancel any shares which, at the date of the passing of the resolution, have notbeen taken or agreed to be taken by any person.43. The company may by special resolution reduce its share capital, any capital redemption reserve fund or any share premium account in any manner and with, and subject to, any incident authorized, and consent required, by law.Purchase of own Shares44. Subject to the relevant provisions of the Ordinance regarding redemption and purchase of shares (namely sections 49 to 49S), the company may purchase its own shares (including any redeemable shares).45. Subject to the relevant provisions of the Ordinance regarding redemption and purchase of shares (namely, sections 49I to 49O of the Ordinance), the company may make a payment in respect of the redemption or purchase of its own shares otherwise than out of the distributable profits of the company or the proceeds of a fresh issue of shares.46. Subject to the relevant provisions of the Ordinance on redemption and purchase of shares (namely, sections 49, 49A, 49B(6), 49F, 49G, 49H, 49I(4) and (5), 49P, 49Q, 49R and 49S of the Ordinance), the company may make such redemption or purchase either out of or otherwise than out of the distributable profits of the company or the proceeds of a fresh issue of shares. The company may also make such redemption or purchase in order to-(a) settle or compromise a debt or claim;(b) eliminate a fractional share or fractional entitlement or an odd lot of shares (asdefined in section 49B(5) of the Ordinance);(c) fulfil an agreement in which the company has an option, or under which thecompany is obliged, to purchase shares under an employee share scheme whichhad previously been approved by the company in general meeting; or(d) comply with an order of the court under-(i) section 8(4) in an application to cancel a resolution passed to amend theobjects of the company;(ii) section 47G(5) in an application to cancel a resolution passed by the company to give financial assistance for the purchase of its own shares; or (iii) section 168A(2) in an unfair prejudice petition,of the Ordinance.Allotment of Shares47. The directors shall not exercise any power conferred on them to allot shares in the company without the prior approval of the company in general meeting where such approval is required by section 57B of the Ordinance.General MeetingsAnnual and extraordinary general meetings48. Subject to section 111(6) of the Ordinance, the company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than 15 months shall elapse between the date of one annual general meeting of the company and that of the next. Provided that so long as the company holds its first annual general meeting within 18 months of its incorporation, it need not hold it in the year of its incorporation or in the following year. The annual general meeting shall be held at such time and place as the directors shall appoint.49. All general meetings other than annual general meetings shall be called extraordinary general meetings.50. The provisions of the articles relating to general meetings apply, with any necessary modifications, to meetings of the holders of any class of shares.51. The directors may, whenever they think fit, convene an extraordinary general meeting, and extraordinary general meetings shall also be convened on such requisition, or in default, may be convened by such requisitionists, as provided by section 113 of the Ordinance. If at any time there are not sufficient directors capable of acting to form a quorum of the board of directors, any director or any 2 members of the company may convene an extraordinary general meeting in the same manner as nearly as possible as that in which meetings may be convened by the directors.52. A resolution in writing signed by all the members for the time being entitled to receive notice of and to attend and vote at general meeting (or being corporations, by a director thereof or by their duly authorized representative) in accordance with section 116B of the Ordinance shall be as valid and effectual as a resolution passed at a general meeting duly convened and held on the date on which it was signed by the last member to sign. Such a resolution mayconsist of several documents which accurately state the terms of the resolution, each signed by one or more relevant members.53. If the company has only one member and that member takes any decision that may be taken by the company in general meeting and that has effect as if agreed by the company in general meeting, that member shall (unless that decision is taken by way of a written resolution agreed in accordance with section 116B of the Ordinance) provide the company with a written record of the decision. Such written record shall be sufficient evidence of the evidence having been taken by the member.Notice of General Meetings54. An annual general meeting and a meeting called for the passing of a special resolution shall be called by 21 days' notice in writing at the least, and a meeting of the company other than an annual general meeting or a meeting for the passing of a special resolution shall be called by 14 days' notice in writing at the least. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, the day and the hour of meeting and, in case of special business, the general nature of that business, and shall be given, in manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the company in general meeting, to such persons as are, under the regulations of the company, entitled to receive such notices from the company.Provided that a meeting of the company shall, notwithstanding that it is called by shorter notice than that specified in this regulation, be deemed to have been duly called if it is so agreed-(a) in the case of a meeting called as the annual general meeting, by all the membersentitled to attend and vote thereat; and(b) in the case of any other meeting, by a majority in number of the members havinga right to attend and vote at the meeting, being a majority together holding notless than 95 per cent in nominal value of the shares giving that right.55. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.Proceedings at General Meetings56. All business shall be deemed special that is transacted at an extraordinary general meeting, and also all that is transacted at an annual general meeting, with the exception of declaring a dividend, the consideration of the accounts, balance sheets, and the reports of the directors and auditors, the election of directors in the place of those retiring and the appointment of, and the fixing of the remuneration of, the auditors.57. No business shall be transacted at any general meeting unless the requisite quorum of members is present at the commencement of the business, provided that the absence of a quorum shall not preclude the appointment, choice or selection of a chairman. Save as herein otherwise provided, the quorum for all general meetings shall be two members present in person or by proxy and entitled to vote. If the company has only one member, that member presents in person or by proxy shall be the quorum of a general meeting of the company.。
ch8A Two-Period Model(中级宏观经济学,香港中文大学)
• Zero wealth endowment in the current period. • Each consumer pays lump-sum taxes in both periods.
Consumer’s Lifetime Budget Constraint
• The slope of the lifetime budget constraint is -(1 + r).
• E is the endowment point ( I.e. where s = 0 ). • Points on BE s 0 consumer is a lender. • Points on EA s 0 consumer is a borrower.
2
• Given that U( ., .) is strictly quasiconcave, > 0.
Consumer’s Problem
• Similar to the one in Chapter 4, the consumer’s optimal consumption bundle is the one at which an indifference curve is tangent to the budget constraint. • This implies the following condition: 1 + r = MRS c,c’
2) The consumer likes diversity in consumption bundle.
08年金融危机做空CDO
信贷市场
证券市场
金融市场
全球市场
信贷 需求
信用 风险
单一 市场 风险
宽松的 信贷审查
科学的 国际准则
全面 市场 风险
金融 风险
滥用资产 证券化
系统性 风险
信用评级 失真
金融监管缺位
监管部门存在针对“次级房贷及其创新产品”的监管真空，不能提前预警和干预市场运行中出现的潜在问题，使泡沫不受限制地膨胀。
合 约 卖 方
合 约 买 方
1、对违约事件的投机者，认为自身有能力承担违约风险 2、出售CDS合约，收取合约费（Premium）； 3、违约事件发生后，向CDS买方补偿约定的贷款或债券损失；
关于衍生工具：次级房贷指数——ABX
ABX指数是专为次级房贷抵押债券设计的指数，通过抽取市场中20支规模较大的次级房贷MBS的价格合成计算而成，每6个月更新一次。投资者可以根据ABX指数的涨跌，通过类似CDS机制“做多”或“做空”
关于衍生工具：信用违约互换——CDS（“保险合同”）
CDS合约的买方： 1、贷款或债券的持有者，不希望承担违约风险； 2、购买CDS合约，支付合约费（Premium）； 3、一旦违约事件发生后，约定的贷款或债券损失 由CDS卖方负责补偿；
第五道防线的弱化——国际准则的副作用
信贷市场
证券市场
金融市场
全球市场
信贷 需求
信用 风险
单一 市场 风险
宽松的 信贷审查
全面 市场 风险
金融 风险
滥用资产 证券化
系统性 风险
信用评级 失真
金融监管缺位
国际准则 的亲周期性
新巴塞尔协议和新会计准则对盯市（Mark to market）的推崇，使得经济繁荣条件下金融机构的财务指标更加“美观”，资本约束更加放松，扩大投资得到鼓励，进一步放大了经济波动风险。
Unit 9 Financial statement
UNIT 9 FINANCIAL STATEMENTThe objectives:●Explain the uses of the statement of financial position, thestatement of comprehensive income and the statement of cash flows.●Identify the major classifications of the statement offinancial position, the statement of comprehensive income and the statement of cash flows.●Prepare a classified statement of financial position,statement of comprehensive income and statement of cash flows.The key point:Be clear about the structures of three main financial statements:✧Statement of financial position✧Statement of comprehensive income✧Statement of cash flowsTeaching method:InstructionPeriod division:Total 6periods.Content:I.Key words:✧Biological assets 生物资产英[,baɪə'lɒdʒɪkl]美[,baɪə'lɑdʒɪkl]adj. 生物学的；生物的；与生物学相关的；有血亲关系的n. [药]生物制品，生物制剂✧Non controlling interest (NCI) 非控制权益✧Utilities 公共事业英[ju:'tɪlɪtɪz] 美[ju'tɪlɪtɪz]n. [经济学]效用（utility的名词复数）；实用；公用事业；神庙逃亡游戏中的一次性道具✧Distribution cost 销售成本英[,dɪstrɪ'bju:ʃn] 美[,dɪstrə'bjuʃən]n. 分配，分布；[法]（无遗嘱死亡者的）财产分配；[无线]频率分布；[电]配电✧Administrative expenses 管理费用英[əd'mɪnɪstrətɪv] 美[əd'mɪnɪstreɪtɪv]adj. 管理的，行政的；行政职位；非战斗性行政勤务的✧Finance cost 财务成本英['faɪnæns] 美[fə'næns, faɪ-, 'faɪ,næns]n. 财政；金融；财源；资金vt. 为…供给资金，从事金融活动；赊货给…；掌握财政✧Performance 业绩英[pə'fɔ:məns] 美[pər'fɔrməns]n. 表演；演技；表现；执行✧Earnings per share (EPS) 每股盈余英['ɜ:nɪŋz] 美['ɜrnɪŋz]n. 收入，所得；工资，报酬；收益，利润✧Liquidity 流动性，偿债能力英[lɪ'kwɪdəti] 美[lɪ'kwɪdɪti]n. 流动性；流动资金；资产流动性；<财>资产折现力✧Solvency 偿付能力英['sɒlvənsi] 美['sɑlvənsi]n. <化>溶解状态，溶解力；偿付能力✧Operating activity 经营活动英['ɒpəreɪtɪŋ]美['ɑpə,retɪŋ]adj. 操作的；营运的；业务上的；外科手术的v. 操作( operate的现在分词)；运转；管理；做外科手术英[æk'tɪvəti] 美[æk'tɪvɪti]n. 活动；活跃，敏捷；活动力；教育活动✧Investing activity 投资活动英[ɪnvestɪŋ] 美[ɪnvestɪŋ]v. 投资，花费( invest的现在分词)；授予；（把资金）投入；投入（时间、精力等）✧Financing activity 筹资活动[fai'nænsiŋ]n. 筹措资金；理财；筹集资金；融资v. 为…供给资金，从事金融活动( finance的现在分词)II.IAS1 Presentation of financial statementsShows the objective of financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions. To meet that objective, financial statements provide information about an entity’s:✧Assets✧Liabilities✧Equity✧Income and expenses, including gains and losses✧Contributions by and distributions to owners✧Cash flowsIAS1 presentation of financial statement requires the components of a complete set of financial statement are:✧Statement of financial position✧Statement of comprehensive income✧Statement of cash flows✧Statement of changes in equity✧Note, including a summary of significant accountingpolicies and other explanatory information.✧Statement of financial position at the beginning of theearliest comparative period when an entity applies anaccounting policy.III.Statement of financial position 财务状况表1.The journal entries of main business transactionsa)Sales of goodsb)Purchase of inventory for resalec)Purchase of non-current assetsd)Payment of expenses such as utilitiese)Introduction of new capital to the businessf)Distribution of dividendsDetails refer to page113-114.2.Items in the statement of financial positionThe standard specifies minimum headings (if they exist at the date of financial statement) to be presented on the face of the balance as follows:a)Property, plant and equipment(PPE).b)Investment property.c)Intangible asset.d)Financial asset.e)Biological assets.f)Inventory.g)Trade and other receivables.h)Cash and cash equivalents.i)Trade and other payables.j)Provisions.k)Financial liabilities.l)Current tax.m)Deferred tax.n)Non controlling interest (NCI).o)Capital and reserves.IV.Statement of comprehensive income 综合收益表Minimum items on the face of the statement ofcomprehensive income should include:a)Revenue.b)Finance costs.c)Share of the profit or loss of associates and jointventures.d)Pre-tax gain or loss recognized on the disposal ofassets etc.e)Tax expense.f)Profit or loss.g)Each component of other comprehensive incomeclassified by nature.h)Profit or loss for the period attributable tonon-controlling interests and owners of the parent.i)Total comprehensive income attributable tonon-controlling interests and owners of the parent. V.Statement of cash flows 现金流量表i.Three classifications of statement of cash flows●Operating activities （relating to the main revenue producing activities）a.Cash receipts from the sale of goods and the rendering of servicesb.Cash receipts from royalties (e.g. franchising, licensing), fees,commissions and other revenuec.Cash payments to suppliers for goods and servicesd.Cash payments to and on behalf of employeese.Cash payments of taxes etc.●Investing activities (acquisition and disposition of PPE and othernon-current assets, which are not for the trading purposes)a.Cash payments to acquire property, plant and equipment, intangibles andother non-current assetb.Cash receipts from sales of property, plant and equipment, intangibles andother non-current assetc.Cash payments to acquire debt and equity instrument of other entities.d.Cash receipts from disposal of debt and equity instrument of other entities,etc.Financing activities (obtaining resources from owners or through borrowings and returning resources to the owners)Cash receipts from customers Xa.Cash proceeds from issuing shares.b.Cash payments to owners to acquire or redeem the entity’s shares.c.Cash proceeds from issuing debentures, loans, notes, bonds and otherborrowings.d.Cash repayments of amounts borrowed, etc.ii.Direct and indirect method for calculating cash from operation activities1.Direct methodThe direct method shows each major class of gross cash receipts and gross cash payments. It is the simply way to extract the information from the accounting record.The operating cash flows section of the statement of cash flows under the direct method would appear something like this:Cash paid to suppliers(X)Cash paid to employees(X)Cash paid for other operating expenses(X)Interest paid(X)Income taxes paid(X)Net cash from operating activities X2.Indirect methodThe indirect method adjusts accrual basis net profit or loss for the effects ofnon-cash transactions.The operating cash flows section of the statement ofcash flows under the indirect method would appear something like this:Operating profit (income statement) X Add depreciation X Loss (profit) on sale of non-current assets X (Increase)/decrease in inventories(X)/X (Increase)/decrease in receivables(X)/X Increase/(decrease) in payables X/(X) Cash generated from operations X Interest (paid) (X) Income taxes paid (X) Net cash flows from operating activities X 3.The reasons why certain items are added and others subtracted are asfollows:a.Expense which not generate cash outflowSuch as depreciation and amortisation is not a cash expense, but has been deducted in arriving at the profit figure. Therefore, to eliminate it by adding it back.b.Expense which not involved in the operating activitiesSuch as a loss on disposal of a non-current asset needs to be added back and a profit deducted.c.Changes of current asset except cash●we have spent cash on buying inventory so the increase in inventoriesmeans less cash.●An increase in receivables means the company’s debtors have not beenpaid as much, and therefore there is less cash.d.Changes of current liabilityIf we pay off payables by cash, causing the amount of payable to decrease, again we have less cash.Summary:Students should be familiar with the detail frame of the three main financial statements. Especially the statement of cash flow, because the content within the cash flow statement is notAccounting English Unit 9 FINANCIAL STATEMENT only simple as the cash payment and cash receipt.STATEMENT OF CASH FLOWSThe objectives:●Explain the uses of the statement of cash flows.●Identify the major classifications of the statement of cash flows.●Prepare a classified statement of cash flows.The key point:Be clear about the structures of the statement of cash flows:✧Operating activities✧Investing activities✧Financing activitiesTeaching method:Instruction, illustration, discussionPeriod division:Total 6periods.Content:Summary:Students should be familiar with the three classifications of cash flow statement. Especially the reasons of the addings and deductions for the operating cash flows under indirect method.11 / 11。
金融类英语词汇的翻译(四)
金融类英语词汇的翻译 (四) exposure 承受风险；收支差〔外汇〕62expressed in Hong Kong dollar 以港元计算external assets 对外资产external auditor 外聘核数师；外聘审计师external claim 对外债权external commercial relations 对外贸易关系external competitiveness 对外竞争力External Department 外事经研部〔香港金融管理局〕external equilibrium 对外均衡external fund manager 外聘投资经理〔外汇基金〕external investor 外来投资者external liabilities and claims 对外负债和债权External Managers Division 外聘投资经理处〔香港金融管理局〕external price competitiveness 对外贸易价格竞争能力External Relations Division 对外关系处〔香港金融管理局〕external sovereign debt 对外国债external trade 对外贸易externally oriented economy 以外贸为主的经济；倚赖对外贸易的经济extinguishment allowance 结业津贴extortionate stipulation 敲诈性的规定extra allowance 额外津贴extra statutory concession 法外宽减extraordinary item 非经常项目；特殊帐项extrapolation 外推法extrinsic value 外在价值；非固有价值63财经类词汇 (F)face value 面值；票面价值facility letter 提供贷款通知书；贷款确认书Fact Book 19XX 《19XX 股市资料》Fact Sheet 《股市资料》factor analysis 因素分析factor cost 要素成本；生产要素成本factor market 生产要素市场factor of production 生产要素factor price 要素价格；生产要素价格factor system 因素计算法factoring company 代理融通公司；代理收帐公司facultative reinsurance business 临时再保险业务Faculty of Actuaries of Scotland 苏格兰精算师学院fair dealing 公平交易fair market value 公平市值fair return 合理利润；合理收益fall back 回落false accounting 伪造帐目false claim of business expenses 虚报营业开支false entry 虚假记项false market 假市family income 家庭收入family living expenses 家庭生活开支family-owned company 家族公司Far East Exchange 远东交易所Far Eastern Economic Review 《远东经济评论》Far Eastern Relief Fund 远东赈济基金fast market 快市；速动市场fast trading 交投畅旺favourable balance 顺差favourable balance of trade 贸易顺差Federal funds 联邦基金〔美国〕Federal funds rate 联邦基金利率Federal National Mortgage Association 联邦国民抵押协会〔美国〕Federal Open Market Committee 联邦公开市场委员会〔美国〕Federal Reserve Board 联邦储备局〔联储局〕〔美国〕Federal Reserve System 联邦储备系统〔美国〕Federal Reserve Wire Network 联邦储备系统通讯网络〔美国〕Federation Internationale des Bourses de Valeurs国际证券交易所联会Federation of Share Registrars 证券登记公司总会fee collection procedure 收费程序64fee payable 应缴费用fees and charges 费用及收费fees and receipts other than appropriation-in-aid不包括补助拨款的收费及收益fellow subsidiary 同集团附属公司Fidelity Fund 互保基金fiduciary 受信人；受托人fiduciary capacity 受信人身分fiduciary duty 受信责任fiduciary issue 信用发行fiduciary loan 信用放款；信用贷款field audit 实地审查〔税务〕Field Audit Group 实地审核组〔税务局〕field audit staff 实地审计人员；实地核数人员final account 决算账户；最后结算final and conclusive assessment 最终及决定性的评税final assessment 最后评税final consumption expenditure 最终消费开支final dividend 末期股息；末期摊还债款final estimate 最终估计final estimate of gross domestic product 本地生产总值的最后估计final goods 最终产品Final Notice for Rates 差饷最后通知书final salaries tax assessment 薪俸税最后评税final settlement 最终结算final settlement price 最终结算价格final statement 决算表final tax 最后税款finance 财务；融资Finance and Management Services Division 财务及行政管理科〔香港联合交易所有限公司〕Finance Bureau 库务局〔政府总部〕Finance CommitteeLimited>财务委员会〔香港期货交易所有限公司；香港联合交易所有限公司〕Finance Committee agenda item 财务委员会议程文件〔立法会〕Finance Committee of the Legislative Council 立法会财务委员会finance company 财务公司Finance Department 财务部〔香港联合交易所有限公司〕Finance Division 财务处〔香港金融管理局〕finance lease 融资租赁finance sectorial index 金融分类指数finance sub-index 金融分类指数Financial Accounting Section 财务会计组〔香港金融管理局〕financial adjustment 财政调整65financial administration 财政管理；财务管理financial adviser 财务顾问Financial and Accounting Regulations 《财务及会计规例》Financial and Institutional Coordinating Committee 财务监督委员会financial appraisal 财政评估financial arrangement 财政安排；财务安排financial assets 金融资产financial assistance 经济援助；财政资助financial auditing 财务审计financial capacity 经济能力financial centre 金融中心Financial Circular 《财务通告》financial commitment 财政承担；财政承担额financial community 财经界financial conglomerate 金融集团financial constraint 财政约束financial consultancy service 财务顾问服务financial contract 财务合约financial control 财务管理；财务控制；财政规控financial derivative 金融衍生工具financial derivative product 金融衍生产品financial discipline 财政纪律；财务约束financial disclosure 财务资料披露financial disclosure rules 财务数据披露规则financial exposure 财务风险financial futures 金融期货financial guideline 财政准则financial implication 财政影响；财政负担；财政承担financial information system 财务数据系统financial infrastructure 金融基础建设；金融基础设施Financial Infrastructure Section 财经基建组〔财经事务局〕financial institution 财务机构；金融机构financial instrument 金融工具；金融票据financial integrity 财政方面的稳健性financial intermediary 金融中介机构financial intermediation service 金融中介服务financial journalist 财经新闻工作者financial liberalization 金融市场自由化financial loss 财政损失financial management 财务管理financial management and budgeting system 财务管理及预算系统financial market 金融市场financial model 财政模式Financial Monitoring Unit 财务监察组〔经济局〕。
ACCA_F7_2008年12月考试【试题答案】
(11,600) –––––––––
22,700
Other comprehensive income Loss on leasehold property revΒιβλιοθήκη luation (w (iii))
(4,500) –––––––––
Total comprehensive income for the year
Revenue (85,000 + (42,000 x 6/12) – 8,000 intra-group sales) Cost of sales (w (i))
Gross profit Distribution costs (2,000 + (2,000 x 6/12)) Administrative expenses (6,000 + (3,200 x 6/12)) Finance costs (300 + (400 x 6/12))
Revenue (300,000 – 2,500) Cost of sales (w (i))
Gross profit Distribution costs Administrative expenses (22,200 – 400 + 100 see note below) Finance costs (200 + 1,200 (w (ii)))
The 1·6 million shares (4,000 x 60% x 2/3) issued by Pedantic would be recorded as share capital of $1·6 million and share premium of $8 million (1,600 x $5).
Guo_2008_-_Financial_Conglomerates_in_China
DRAFT PAPER—PLEASE DO NOT REFERENCE WITHOUT THE AUTHOR’SPERMISSIONPaper for Cornell-PKU Conference, June 9-10, 2008, IthacaFinancial Conglomerates in China: Legality, Model and ConcernsLi GUO∗Abstract:Through recent amendments of its Commercial Bank Law and Securities Law, China has gradually softened its previous position mandating the segregation of financial business and supervision, as well as explored the financial conglomerate operation. Two models are considered in particular, namely the “universal bank” model, prevailing in Europe, and the “financial holding company” (FHC) model in the US. This Paper suggests that now neither the universal bank nor the FHC model should be embraced hastily in China without a critical eye. While the FHC sounds a likely choice, it contains drawbacks and unfitness that merit discussion. The choice of models largely relies upon a careful reading of legal, factual and historical contexts. Transforming State Owned Commercial Banks (SOCB) and other financial institutions into the public-held and independent companies shall be a prerequisite and propellant to any meaningful structural reform, including the financial conglomerate issue.Key words:Financial Conglomerate, Financial Holding Company, Universal Bank, Model Evolution, Path DependenceTable of contentsPart I. Law Amendments in ChinaPart II. The Universal Bank ModelPart III. The Financial Holding Company ModelPart IV. Japan: A Parallel ExplorerPart V. Conclusion∗ Associate Professor, Peking University (PKU) Law School, LL.D. (PKU), LL.M. (Harvard & SMU).In the past ten years, China took the general position of separating different financial businesses, and putting them under segregated supervision. Nonetheless, recent amendments to the Commercial Bank Law and Securities Law seemed to open the door for financial conglomerate operations. Two models have been considered in particular, namely the “universal bank” model, prevailing in Europe, and the “financial holding company” (FHC) model in the US. Through theoretic analysis and review of the latest development, this paper suggests that at China’s current stage neither the universal bank nor the FHC model should be embraced hastily without a critical eye. While the FHC seems a likely choice, it contains drawbacks and unfitness that merit discussion. Transforming State Owned Commercial Banks (SOCB) to public-held and truly independent entities shall certainly be a prerequisite and propellant to any meaningful structural reform, including the financial conglomerate issue.Part I. Law Amendments in ChinaBefore 1978, when China began its reform, banks in China had functioned like government bureaus, playing the role of allocating capital under the central-planned economy scheme.1Thanks to the market liberation, they groped to learn how to be independent and operate like “real banks.”2To provide the foundation for the development of safe, liquid, and efficient commercial banks,3China promulgated the Commercial Bank Law in 1995, in which Article 43 provided that:Commercial banks shall not be permitted to engage in trustinvestments and stock operations and shall not be permitted toinvest in real estate within the territory of the People’s Republic ofChina that is not for their own use, shall not be permitted to investin non-banking financial institutions and enterprises within theterritory of the People’s Republic of China. In the event that acommercial bank has already invested in non-banking financialinstitutions and enterprises prior to the implementation of this Law,the State Council shall stipulate implementation measuresseparately.4The principle of separation between banking and securities activities was also reiterated and stressed in the Securities Law enacted in China,5 which mandated that: Securities business shall be engaged in and administered as abusiness separate from the banking business, trust business and1Andrew Xuefeng Qian, Transforming China’s Traditional Banking System Under The New National Banking Laws, 25 G E. J. I NT’L & C OMP. L. 479, 481 (1996).2Id. at 488.3 Commercial Bank Law, art 4.4The State Council or the Central Bank through authorization set a timetable for those banks to phase out of the securities business.5The law was passed on Dec. 29, 1998 and took effect on July 1, 1999.insurance business. Securities companies shall be establishedseparately from banks, trust companies and insurance companies.(Art.6)The flow of bank funds into the stock market against regulations isprohibited. When carrying out business on its own account, asecurities company shall use its self-owned funds and funds raisedaccording to law. (Art. 133)Those articles were designed to curtail the influx of funds from commercial banks, in particular to deter the wholly SOCB from entering China’s then fledgling securities markets. Two stock exchanges (Shanghai and Shenzhen) of China opened successively in 1990 and 1991, formally symbolizing the comprehensive restoration of China’s securities business. Still in an early stage, China’s stock market was comparatively small and stock prices often volatile. Moreover, state-held corporations made up the majority of listed companies, a fact that explains many unique features of China’s securities market.Unlike that in Southeast Asia, the “hot money” that plagued China’s stock market in the early 1990s was not from foreign hedge funds, since China had yet to open its door to currency convertibility under capital accounts. Actually, loans by commercial banks were blamed as the major source of speculative funds. With economic development, household savings and deposits from enterprises had grown rapidly since 1980s. At the same time, external regulations restricted banks from making loans to their former main clients – state owned enterprises, while internal efforts to control risks made them reluctant to do so.6Faced with deposits in excess of loans, commercial banks had a strong incentive to divert some funds into speculative outlets and reap more gains.7Banks often transferred funds to their affiliated Trust and Investment Companies (TICs) that could directly engage in securities activities or re-lend capital to securities companies. By doing so, commercial banks were able to circumvent the then effective credit controls on the banks themselves. Commercial banks played a major role in China’s financial system. Among these banks, the four SOCBs dominated,8which were described as the “the only financial institutions with muscle.”9The use of funds from these banks for manipulative securities practices wreaked havoc on China’s emerging stock market, and had the potential to ruin the banks themselves and ultimately the whole economy. These misgivings motivated China to decide in 1995 to separate commercial banking from non-banking activities, either directly or through TICs under their purview.6Solomon M. Karmel, Securities Markets And China’s International Economic Integration, 49 J. I NT’L A FFAIRS 525, 526 (1996).7Deposit Figures Highlights Progress, S. China Morning Post, Sept. 14, 1995, at 6.8The four state owned commercial banks are the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), the China Construction Bank (CCB), and the Bank of China (BOC).9Dede Nickerson, Business News, S. China Morning Post, May 15, 1995, at 4.Things change as time passes, and so for policy and law. After Japan and the U.S. successively pulled down their Glass-Steagall walls, which had imposed a strict separation between commercial banking and securities activities, proposals poured in for China to reconsider its position by revising or repealing the related provisions. On December 27, 2003, the Standing Committee of China’s National People’s Congress passed thirty-seven amendments to the Commercial Bank Law,10including an amendment to Article 43:Commercial banks shall not be permitted to engage in trustinvestments and stock operations and shall not be permitted toinvest in real estate within the territory of the People’s Republic ofChina that is not for their own use, shall not be permitted to investin non-banking financial institutions and enterprises within theterritory of the People’s Republic of China. The foregoing shall notapply where the State has rules stipulating otherwise. (Emphasisadded.)On October 27, 2005, the amendment to Securities Law brought similar changes to the related provisions:Securities business shall be engaged in and administered as abusiness separate from the banking business，trust business andinsurance business. Securities companies shall be establishedseparately from banks, trust companies and insurance companies.The foregoing shall not apply where the State has rules stipulatingotherwise. (Article 6, emphasis added.)Channels for the flow of funds into the market shall be widened,and the flow of funds into the stock market in violation ofregulations is prohibited. (Article 81)11Those changes suggest that if and when the State deems appropriate, it can promulgate rules or regulations, authorize commercial banks to cross the line into the securities business, and vice versa. 12Though it is not clear if the State in those amendments is the State Council or some other body, such as National People’s Congress or its Standing Committee, the path seems to be paved for banks and securities companies to evolve into financial conglomerates, either by self expansion or through affiliation. Two different models have been often discussed to achieve such transformation—the European universal bank model and the US financial holding company model (FHC).10All amendments took effect on February 1, 2004.11Effective on January 1, 2006.12LU Xue, Report: ZHOU Zhengqing Talks on the Forthcoming Revision of Securities Law, at /celeb300/visited303/303_0312/303_03123001.htm (last visited Mar. 16, 2007). Mr. ZHOU Zhengqing is the former chairman of China’s Securities Regulatory Commission (CSRC), and currently serves as the Associate Chairman, Fiscal & Financial Sub-Committee, Standing Committee of China’s National People’s Congress. He was also in charge of the then ongoing amendment to Securities Law.Part II. The Universal Bank ModelTraditionally, in those European countries such as Germany, Italy, Switzerland and the Netherlands, commercial banks were licensed to participate in the securities services and a broad array of other financial services. Under the German model, universal banks “can perform a wide variety of financial services including taking deposits, making loans, underwriting securities issues, dealing in precious metals and collectible coins, and brokering real estate.”13Acclaiming such banks as the “backbone of the rapid and successful German industrialization of the late nineteenth century”,14William L. Horton, Jr. identified four specific characteristics of the German banking system that contributed to its successful development:15(1) close ties to industry;16(2) independent decision making; (3) competent central bank and active regulatory support; (4) specialization of functions.The EU Second Banking Directive (SBD) in 1989 provided that17EU banks, securities firms and most foreign institutions participating in the “single market” may engage in a qualified “universal banking,” which allows a bank to transact commercial and investment banking functions within the same corporate entity.18To create a “level playing field”, the SBD embraced three principles:19(1) Mutual Recognition, which mandates that if a service can be provided legally under specific conditions in one EU country, it cannot be proscribed under similar conditions in another EU country;20(2) a Single Banking License, which means that once a bank is licensed by the proper authorities in its home country to engage in certain activities, it is permitted to transact those same activities in any other Member State under the single banking license, without need to get permission in the host country;21and (3) an agreed-upon list of banking activities. Article 18 (1) of the SBD provides that EU countries must allow the activities listed in the Annex to the Directive to be carried on within their territories, and those activities are covered by home state authorization.22 These specified activities include not only the traditional banking services of accepting deposits and lending, but also most of the services that investment banks traditionally provide such as trading and underwriting securities, portfolio management, corporate finance, and mergers and acquisitions services.2313William L. Horton, Jr., The Perils of Universal Banking in Central and Eastern Europe, 35 V A. J. I NT’L L. 683, 684 (1995)14Id. at 685.15Id. at 692.16For example, German universal banks often gained membership on the board of directors of their industrial customers and assumed a large influence over the firm’s governance by exchanging capital for large equity stakes in their clients.17Formally speaking, the SBD has been superseded by Directive 2000/12/EC of the European Parliament and the Council, March 20, 2000, that codified the SBD along with other legislation relating to banking, e.g., the Capital Adequacy Directive. However, the substance of the SBD remains unchanged.18Joseph J. Norton & Christopher D. Olive, The Ongoing Process of International Bank Regulatory and Supervisory Convergence: A New Regulatory—Market “Partnership, 16 A NN. R EV. B ANKING L. 227, 252 (1997). 19George S. Zavvos, Banking Integration and 1992: Legal Issues and Policy Implications, 31 H ARV. I NT’L L. J. 463, 482 (1990).20A LFRED L EWIS & G IOIA P ESCETTO,EU AND US B ANKING IN THE 1990S 12–13 (1996).21Id.22Id.23Norton/Olive, supra note 18, at 253.The application of these principles resulted in competition for deregulation between the regulatory agencies of each member country, because one country’s bank may achieve a competitive advantage over another country’s bank by providing domestic customers with products that domestic banks are proscribed from offering, but that are permitted by the SBD.24Thus, all other EU countries had a strong incentive to move towards the least restrictive German universal bank model,25which actually resulted in a competitive de-regulation of the financial services in the EU financial services industry.26The SBD illustrated some fundamental ideas. First, the EU believes that diversification, through participation in the securities industry, adds depth and liquidity to commercial banks.27Second, the EU assumes that the securities activities of banks help them maintain overall earnings when the conventional banking business is suffering from decreased profits.28Third, the EU views the more flexible universal banks as a powerful means to compete in the global financial marketplace.29Some academic research also showed that shares of universal banks embody substantial franchise value, which serves to inhibit extraordinary risk-taking.30The SBD left supervision to the home countries. Then a 1992 Council Directive established the principle of consolidated supervision of the various entities within a banking group.31In April 2001, the European Commission proposed a Directive to deal with financial conglomerates, which was then agreed upon by the Council in May 2002.32Among other things, this Directive seeks to insure that the same capital is not used to support different regulated institutions, as well as to address supervisory concerns on intra-group transactions.At first glance, both Germany and China seem to have an underdeveloped securities market.33Like the age-old question of whether the chicken or the egg came first, the relationship between uncompetitive securities markets and universal banks runs in such a self-reinforcing cycle,34which supports the idea that China ought to adopt that 24L EWIS/P ESCETTO, supra note 20, at 12.25Zavvos, supra note 19, at 483.26L EWIS/P ESCETTO, supra note 20,at 13.27Zavvos, supra note 19, at 481.28Id.29Id. at 482.30Rebecca S. Demsetz, et al., Banks with Something to Lose: The Disciplinary Role of Franchise Value, 2 F ED. R ES.B ANK OF N.Y.E CON P OL’Y R EV., Oct. 2, 1996 at 1–4.3192/30/EEC (April 28, 1992).32John F. Mogg, Regulating Financial Services in Europe: A New Approach, 26 F ORDHAM J. I NT’L L AW58 (2002).33Gerhard Wegen, Colloquium: Transnational Financial Services- Current Challenges for an Integrated Europe, 60 F ORDHAM L. R EV. 91, 104 (1992). This article states that in Germany, of 2,500 stock corporations, only 650 corporate entities were listed on any German stock exchange by May 1992; of these listed corporations, approximately thirty account for three fourths of all turnover on the German stock exchange. Comparatively, Germany has approximately 350,000 limited liability companies, 30,000 general partnerships and 130,000 limited partnerships.34Amy Chunyan Wu, PRC’s Commercial Banking System: Is Universal Banking a Better Model?, 37 C OLUM. J. T RANSNAT’L L. 623, 634 (1999).model. In terms of scale and degree of concentration, China’s banking system also resembles the German banking system more closely than that of the US.35 Particularly in the above four characteristics pinpointed by William L. Horton, Jr., “ties to industry”36and “specialization of functions” are characteristics of both countries.However, the dissimilarities in the other two characteristics cast serious doubt on the appropriateness of the universal bank model for China. Created as private entities, German banks are free from control by the government or their clients. While they maintain close ties with their customers, they are not known to shy away from asking tough questions when making loans. In addition, German bankers have the skills and experience to make efficient allocation decisions.37Notwithstanding legislative provisions emphasizing the independence of banks,38China’s banks lack the autonomy and capacity of their German counterparts.Moreover, the establishment of the universal bank system in Germany benefited from the presence of an active and competent central bank to ensure the system’s stability.39Both People’s Bank of China as the central bank and China’s Banking Regulatory Commission as the current major banking regulator clearly still have a long way to go in this respect. Furthermore, concerns have also been raised that because the universal bank model features a close connection between banks and industries, it might drag China back to the old track of the planned economy, or to the bank-enterprise distress chain that obsessed Japan.Part III. The Financial Holding Company ModelBy comparison, the US style FHC approach seems more innovative and has gained more popularity during the past few years in China. Some comprehensive financial holding group companies have emerged in China: for instance, the Everbright Group, which had two banks, two securities firms, and one life insurance business in cooperation with a Canadian insurance company, officially announced its exploration as FHC in the summer of 2007. Other cases include the renowned China International Trust and Investment Corporation Group (CITIC Group), the Ping An Insurance Group derived from an insurance giant, etc. They are at the forefront of the development of US-styled FHCs in China and constitute a very influential interest group lobbying for legislative accommodation and administrative adjustments.35Y ANG H AIQUN, B ANKING AND F INANCIAL C ONTROL IN R EFORMING P LANNED E CONOMIES 76 (1996).36Although legally Article 43 of Commercial Bank Law bans commercial banks from investing in enterprises within the PRC, historically, state specialized banks and state owned enterprises maintained an intertwined relationship. Even now, to some extent and in some form, such interconnections still remain.37Horton, Jr., supra note 13, at 696.38For example, Commercial Bank Law, art. 4.39Horton, Jr., supra note 13, at 700.With the Glass-Steagall Act passed in 1933, banking, securities and insurance in the US were for decades carefully segregated with separate regulation.40However, recent legislation has relaxed restrictions on affiliations among companies in these different fields and emphasized operation of different functions from separate companies within a group of related companies. The Gramm-Leach-Bliley Act (GLB Act, Financial Modernization Legislation) enacted on November 12, 1999 substantially overhauled the Glass-Steagall Act, and brought about some fundamental changes.First, the GLB Act expressly repealed Sections 20 and 32 of the Glass-Steagall Act, eliminating the restrictions on banks and securities firms from affiliating and sharing personnel. Second, it created a holding-company structure by amending the Bank Holding Company Act to include a provision applicable to financial holding companies. Under the GLB Act, companies engaged in commercial banking, investment banking and insurance activities may be owned and operated by a single FHC as long as the business conducted is “financial in nature or incidental to such financial activity, or complementary to a financial activity and does not pose a substantial risk….” Third, purporting to streamline the FHC supervision, the GLB implicitly designated the FRB as the umbrella regulator of FHCs, with functionally regulatory authority over the commercial banks, investment banks, and insurance companies in the structure delegated to the appropriate regulators.As a whole, the US stock market reacted positively to the passage of the GLB Act. When President Clinton announced the Act, both commercial and investment bank stocks rose.41Studies also showed that the market responded most favorably to the 40The Glass-Steagall Act was actually the popular name for §§16, 20, 21 & 32 in the Bank Act of 1933.41Cara Lown, et al., The Changing Landscape of the Financial Service Industry: What Lies Ahead? 6 F ED. R ES.shares of BHCs that had already engaged in some securities businesses (those with Section 20 subsidiaries allowing limited investment banking activities).42On the other hand, doubts remain relating to the soundness of such changes. For instance, was the repeal of Glass-Steagall appropriate? Some critics in the US remain suspicious that safeguards designed in the GLB are not sufficient to eliminate hazards such as conflicts of interest, and even less safeguards are available to resolve emerging problems such as undue encroachment upon consumer privacy.43In their view, the “subtle hazards” that justified the Glass-Steagall wall are still legitimate concerns and are not being handled appropriately by the GLB.44As once expressed by the US Supreme Court in Investment Company Institute v. Camp,45such “subtle hazards” that occur when a commercial bank enters into the business of investment banking directly or indirectly through an affiliate include: (1) an adverse effect on public confidence if the bank or affiliate performs poorly because of the association in the mind of the public; (2) the risk of unsound loans to the ailing affiliate in an effort to raise public confidence; (3) the risk that the bank may provide credit more freely to companies in which the affiliate has a vested interest; (4) the risk that the bank may act more as a salesman than as an unbiased source of credit; (5) the risk that customer goodwill will diminish if losses are incurred because of the affiliate; (6) the loss of reputation for prudence and restraint because of investment banking needs; (7) the temptation to make loans merely to facilitate the purchase of more securities; (8) conflicts of interest between the need to offer impartial advice as a commercial bank and the salesman’s interest as an investment bank.46In 2003, the US Congress considered whether to cut back on the GLB due to concerns about conflicts of interest between the banking and securities businesses of FHCs, for example, the concern that banks were tying loans to underwriting. Similar “mixed bundling” abuses included that the price of lending was dependent on the client also taking another service, like M&A advice. Nevertheless, some opined that such worries were unfounded because such tying would have already been prohibited by the anti-tying provision of the BHCA (§ 106), at least where a bank “coerces” a customer to buy the tied product.47Moreover, such coercion could not exist unless the bank had more leverage in the lending market, which is unlikely in the current situation.B ANK OF N.Y. E CO. P OL’Y R EV., Oct. 2000, at 39–55.42YU Li, On the Wealth and Risk Effects of the Glass-Steagall Overhaul: Evidence from the Stock Market, New York University (2001) (unpublished manuscript, on file with author).43H OUSE C OMMERCE W RANGLE WITH P RIV ACY IN A PPROVING F INANCIAL S ERVICES M EASURE, B ANKING P OL’Y R EPORT. V OL. 72, No. 24 (1999).44Joan M. LeGraw & Stacey L. Davidson, Glass-Steagall and the “Subtle Hazards” of Judicial Activism, 24 N EW E NG. L. R EV. 225, 225–28 (1989).45401 U. S. 617 (1971).46Id. at 630–37.47F EDERAL R ESERVE B OARD, P ROPOSED I NTERPRETATION OF S ECTION 106 OF THE B ANK H OLDING C OMPANY A CT, (Aug. 25, 2003).As of April 2003, there were 639 FHCs formed in the US, including about twenty by foreign banking organizations. Only a small number of large FHCs have purchased securities firms since the enactment of the GLB. Instead, FHCs have mainly been used to free holding companies from restrictions placed on existing securities affiliates, such as limits on underwriting and dealing twenty-five percent of the securities affiliate’s revenue. Similarly, no FHC has acquired a large insurance company since the Citi-Travellers, which was prior to the enactment of the GLB. Moving back to the focus of this paper, should and could China continue to follow the US’ suit and readily embrace the FHC model? Further concerns deserve attention. First, some inherent problems of FHCs have to be carefully dealt with, for instance, those relating to capital adequacy, corporate governance, and risk control: (1) Capital adequacy: A poorly regulated holding company might finance the capital of its subsidiaries through the excessive issuance of debt instruments, or a subsidiary might use its assets to capitalize its affiliate, which would lead to double or even multiple accounting of limited capital within the FHC. (2) Corporate governance: Diversified businesses present more challenges to the internal control of improper interest transfers, and the endogenetic systematic risks of the financial industry make the problem even subtler. (3) Risk control: Based on US data from 1971 to 1987, a test of hypothetical mergers showed that mergers between BHCs and insurance companies could have reduced risk, while mergers between BHCs and securities firms could have increased risk.48The problem of conflict of interest deserves particular attention. In 2001 and 2002, even Citigroup and J.P. Morgan were troubled by US corporate scandals involving conflicts of interest, and both lost over a third of their market value in a short period. In the meantime, the issue of transparency eventually forced a breakup of GE Capital’s organizational structure. Preventing conflicts of interest inherent within the FHC proves expensive, since compliance systems are costly to maintain, and various types of separation mechanisms between business units can have high opportunity costs, because they give rise to inefficient uses of information and other resources within the organization. Moreover, the contagious character of loss of reputation can be quite severe.49It demands enormous effort to strike a subtle balance and accommodate various interests properly. For a country like China lacking prior experience and preparation in this field, a long period of trial and error might well be necessary.Second, the vast differences between the US and China should not be underestimated when deciding what approach to take. As a whole, the GLB of 1999 was intended to level the playing field and enhance competition in the financial service industry50by 48 John Boyd, et al., Bank Holding Company Mergers with Non-bank Financial Firms: Effects on the Risk of Failure, 17 J.F IN.E CO. 43–63 (1993).49I NGO W ALTER, S TRATEGIES IN F INANCIAL S ERVICES, THE S HAREHOLDERS, AND THE S YSTEM: I S B IGGER AND B ROADER B ETTER?B ROOKING-W HARTON P APERS ON F INANCIAL S ERVICES 21 (Brookings Institution Press 2003). 50See Preamble of this Act.。
2008 P&G Finance & Accounting, “CFO Challenge” Competition Case Study
2008 P&G Finance & Accounting, “CFO Challenge” Competition Case StudyYour task is:This is a case of new product launch. You, Mr. Money, are the financial analyst of Company Doctor & Tangle (D&T). Now, you are involved in the project as the finance member, and you are asked to provide management a recommendation with pay off analysis about the new product launch:1) One page Cover Letter (A4) including a) NPV /IRR result, b) strategy to drive better financial result, c) risk andopportunity of the product. We would not screen any submitted cover letter which is more than one page.2) NPV calculation model (Excel Worksheet)It’s a tough road to success!Company Doctor & Tangle (D&T) launched a new liquid product named “Olike” in 2003-04; the brand quickly grew to a market share of 10% within a year, eating into the share of “Awell” –the market leader brand of the competitor Unicom. The brand grew volume in year 2 of launch, but not at the expected levels. And after that, volumes flattened and took a downward turn, so did profits. The brand grossly undelivered on annual volume and profit targets for two consecutive years and was all set to accomplish a strange hat-trick this year (07-08)! Projection of volumes for future years, made by the market research (MR) department, reflected the same downward trend. (See table below). Interestingly, “Awell” had also been declining, but that was no consolation!*Projections.Country management was extremely concerned about this brand and CEO Luck appointed a special team - Project Revival for resurrection of “Olike”. The team included Marketing, Sales, Product Research and Development (R&D), Consumer and Market Knowledge (CMK), Finance and Product Supply (PS); Dearia was appointed as the project leader. The past few months had been a nightmare for her.She had started off by looking afresh at reasons for the decline of the brand - what had been the assumptions when the brand was launched? What went against these assumptions? CMK fielded consumer tests and the results showed that both trial and repeat rates were on a declining trend, and were far below the levels assumed in the launch financials. This was true of all the brands in the liquid segment. Trial and repeat on “Olike”, in particular, did reach projected levels in year 1 and part of year 2, but ever since, had been decreasing. Having got this lead, the team then sought the reasons for this.Some more consumer tests later, they discovered the market was slowly moving towards compact packaging, and the bulky bottles of liquids were no longer popular with consumers. This, according to them, was more convenient than using the liquid. It led to the substantial increase in the compact products. Data also showed that consumers were overall satisfied with the performance of “Olike”, but there was dissatisfaction on storage a nd quantity/use.The direction to work on was clear. The group went back to CEO Mr. Luck with a proposal to launch a compact product. With the support of the data they had gathered, they convinced Luck that this was the right thing to do. Mr. Luck concurred the proposal, but highlighted that the financial target for Olike Compact was a minimum NPV (@10%, 5 Year) of $ 1000M and IRR of 25%, (which were the hurdle rates of NPV and IRR for all new projects in the company), and a profit margin of at least 9% by year 2. The launch timing should be in the first month of fiscal 08-09. With management backing, they started work on this new product.For Dearie, the job had just begun. A lot of work was done on designing a selling concept for this new product. Their job was made easier by an CMK test on performance of compacts. A couple of concepts were short listed and tested with consumers, and the final concept was ready. The group then developed and tested different formulations, tested these with the consumers, and finally zeroed in on one, which met with favorable consumer feedback on all the parameters. Test results showed very high scores on most performance parameters, and this time, also on convenience of storage, dosage and handling. Pricing, it was decided, would be parity to the current liquid on a per use basis. The price point was also tested out. This price gave the same $/unit of realization as the current Olike liquid.Simultaneous to the work on product and concept, the sourcing person on the team, Mr. Go of Product Supply, was working on options of how to make the product. This being a new form of product, it involved a lot of research. Finally, Mr. Go recommended that they use the current liquid plant with some modification and equipment investment. The capital cost for this modification /equipment was $ 3000M, which would be incurred right at the beginning. The liquid plant was an old one which D&T had bought from another supplier when Olike liquid launched, almost wholly depreciated.The CMK person on the team, Miss. Data -had worked extensively on consumer research data. She came up with the following projection of volume on the brand for the coming years.Miss Data contended from consumer data that the market is likely to stagnate after 2-3 years, and her projections reflected this. She logically explained to the team how she had arrived at these numbers. The marketing person on the team, Mr. Hero, however, felt this projection was extremely conservative. He thought that 1) consumers are overall satisfied with the new product performance, 2) I have a winning concept for the new product; 3) I will have many marketing activities to boom the launch. His volume projection is also shown above. Miss Data, however, was skeptical about Hero's numbers - "These numbers build in more of hope and gut feel than hard data", she said. The group was divided about which numbers to use - Data's or Hero's. Mr. Hero’s marketing plan indicated a spending budget of $ 1150M in the first year, $ 1080M in the second, and $ 900M thereafter.The current Olike Liquid was to be completely replaced by Olike Compact, so there was no question of any cannibalization. The current liquid financials as below:The new compact product formula was to cost $ 0.50/unit more than the current liquid. Most of this up-charge was due to import of one of the raw materials (Team had not sufficient lead time for local sourcing), leading to up-charge on account of import duty, air freight etc. Up-charge on manufacturing expense was limited to $0.05/unit over the liquid because of use of existing capacity. There was an up-charge of $ 0.10/unit due to use of special labels, but only in the first year. They had plans in place to remove this up-charge from year 2 onwards. Because of a smaller pack size now (due to the compact form), more cases could be loaded into one truck, leading to a saving of $ 0.15/unit on freight cost.The team sought the opinion of the Corporate Forecasting group to decide the overheads (administration expense) that the new brand would absorb. They decided that the overhead rate / unit for the compact for future years would be the same as those projected for the current liquid (see Annexure I). However, to be fair on this brand, it would not absorb more than a certain absolute amount of overhead in a particular year, as per the table below. (This was done to ensure that with higher volumes, per unit overhead on the brand went down.)Can we deliver it?While Dearie's team worked on the project day and night, two streets away, lights used to be burning late into the nights at another office as well - the office of Unicom. The brand group of Awell liquid was working on a revival project of their own! They too came up with similar results and similar proposals. They were testing their new compact product in the market, when one of D&T's sales persons picked up a pack and gave it to Mr. Research of R&D department for testing. Mr. Research put his heart and soul into analyzing the product, and published their findings in record time - Unicom had come out with a parity product to Olike, and at parity pricing!Back in D&T's office - The same conference room, the same team of Project Revival and the same Dearie - They sat with the revised volume projections that Miss Data had worked out after they had known about the impending launch of Awell Compact. Miss Data had taken down volumes for all years by 10% from the earlier estimate.This time Mr. Research came into the room, "Dearie, our recent post-use product tests show that consumers are showing a dissatisfied rating on one product attribute - Our compact, and also that of Awell, clogs in the container a few days after the container is opened. This poses problems when dissolving in water. In our earlier short list, we had a formulation which had an ingredient to take care of this problem. We had rejected it at that point because of the upcharge it entailed. But now, I think, with Awell coming out with a parity product, and knowing that this is a major product negative, we should look at upgrading the current formulation to this non-clog one. This will be a win v/s Awell, and will definitely give us more volumes. It will also be difficult for them to replicate this because the chemical involved has been developed internally in our labs. The upcharge, however, is $ 0.50/unit in the first two years. We can take it down to $0.40/unit in year 3 and 4 and $ 0.30/unit beyond that, but I cannot promise any more reductions now."Miss Data shuffled through her papers and found what she was looking for. She said, "This formula will increase volumes by 20%. We had tested it in one of the legs. As this segment is extremely price-sensitive, I also tested different price point impact. With no performance benefit over competition, if we take up price 20% (+$0.50/unit), volumes will go down by 20%, but when we explore the option of pricing up by only $0.25/unit, volume decrease will be 70% lesser, that is will be only 14% v/s 20%. Now if we apply the better formulation, there is less volume impact while price up. If we price up by $0.5/unit, volume will go down by 12% (v/s 20% without the formula upgrade), but if we price up by only $0.25/unit, the volume decrease will be 70% les ser than 12%.”While the team hotly discussed the volume, pricing, formulation, etc, Mr. Hero suddenly showed the below table, and questioned: “Why Olike offered double trade discounts vs. Awell, can we cut it down?” Mr. Sales responded quickly: “As you can see from this data, we are just at present behind Awell. Trade is already lobbying with us to raise discount to at least $0.30/unit, but we have strongly rejected this. There is already some amount of discontent among them due to this. But it is OK so far because we are still double of Awell, and all said and done, we are the no. 2 brand in the market. In fact Awell was also at $0.24/unit just three months back, but due profit pressures, they slashed it by half. Due to this, Unicom have run into trouble with the trade and are still grappling with the issue. As a result of all this, in fact, the trade is more favorable towards Olike at present than Awell, and I really do not want to disturb this situation." “Further, if we have to reduce discount to ha lf, volume will roughly go down by 7% (this was the effect on Awell volumes post their halving the discount.) And of course, needless to say, a lot of effort will have to be put into managing trade relations due the reaction it will evoke.”The group still discussed hotly. Dearie said: "Now we have a few options, Guys and gals, what now is the best way to meet the NPV, IRR and margin criteria? Mr. Money, could you please provide me a holistic picture and a recommendation next Monday? Let’s talk then. "Additional Information1) Project year is 5 years;2) Ignore any Tax impact (VAT, income tax);3) COCC for NPV estimation is 10%;4) Working capital assumes 7.5% of net realization and will be returned in Year 5;5) No capital depreciation, assumes capital investment as one-time cost.。
An Analysis of the Financial Crisis of 2008
An Analysis of the Financial Crisis of 2008: Causes and Solutions*AbstractThis research evaluates the fundamental causes of the current financial crisis. Close financial analysis indicates that theoretical modeling based on unrealistic assumptions ledto serious problems in mispricing in the massive unregulated market for credit default swaps that exploded upon catalytic rises in residential mortgage defaults. Recent academic research implies solutions to the crisis that are appraised to be far less costly than a bailout of investors who made poor financial decisions with respect to credit analysis. JEL: G11, G12, G13, G14_____________________________________________________________________ ___*by Austin Murphy, Professor of Finance, Oakland University, SBA, Rochester, MI 48309-4493 (248-370-2125; jamurphy@).1An Analysis of the Financial Crisis of 2008: Causes and SolutionsThe financial crisis in 2008 is of such epic proportions that even astronomical amounts spent to address the problem have so far been insufficient to resolve it. Besidesthe well-publicized $700 billion approved by Congress, the Federal Reserve has attempted to bail out institutions and markets with about $1.3 trillion in investments in various risky assets, including loans to otherwise bankrupt institutions and collateralizeddebt obligations like those backed by subprime mortgages that are defaulting at rapid rates (Morris, 2008). A further $900 billion is being proposed in lending to large corporations (Aversa, 2008), making a total of nearly $3 trillion in bailout money so far,without even counting the massive sum of corporate debts guaranteed by the U.S. government in the last year. An analysis of the fundamental causes of this “colossal failure” that has put “the entire financial system… at risk” (Woellert and Kopecki, 2008)is warranted in order to both solve the problem and avoid such events in the future. Root Cause of the Crisis: Mispricing in the Massive Credit Default Swaps Market Many blame defaulting mortgages for the current financial crisis, but this massive tragedy is only a component and symptom of the deeper problem. The pricing of creditdefault swaps, whose principal amount has been estimated to be $55 by the Securities andExchange Commission (SEC) and may actually exceed $60 trillion (or over 4 times thepublicly traded corporate and mortgage U.S. debt they are supposed to insure), are totallyunregulated, and have often been contracted over the phone without documentation2(Simon, 2008), is the primary fundamental issue from which all the other problems of thecrisis emanate.Credit default swaps are actually rather simple instruments in concept, merely mandating that one party paying a periodic fee to another to insure the debts of some entity (such as a specified corporation) against default for a particular amount of time like5 years. They are effectively debt insurance policies that are labeled otherwise to avoidthe regulation that normally is imposed on insurance contracts. This unregulated marketgrew astronomically from $900 billion at the turn of the millennium to over $50 trillionin 2008 after Congress enacted a law exempting them from state gaming laws in 2000 (PIA Connection, 2008)..Any investment in a debt requires compensation not only for the time value of money but also a premium for the credit risk of the debt. Compensation for the time valueof money is usually provided by the debt promising, at a minimum, a yield equal to thatof the rate available on default-free government securities like U.S. Treasury bonds. Thecredit risk premium above that rate must compensate investors for not only the expectedvalue of default losses but also for the systematic risk relating to the debt, as well as forany embedded options (Murphy, 1988).In a credit default swap or bond insurance contract, there is no initial investmentin the debt by the insuring party, and so only a credit risk premium is required. This premium must, however, include both the default risk premium and the systematic riskpremium. Appropriate appraisal methods for estimating those premiums have long beenknown (Callaghan and Murphy, 1998).3However, many practitioners today apply pure mathematical theories to evaluate credit risk and estimate credit risk premiums to be required (Glantz and Mun, 2008). Themodels of such “‟quants‟ who have wielded so much influence over modern banking” areoften “worse than useless” (NewScientist, 2008b). Some investors in debt securities lookonly at the credit ratings provided by a few rating agencies such as Moody‟s and Standard & Poors (S&P), which themselves evaluate credit using such models. Thosemodels, which use statistics to uncover past relationships between debt defaults and a fewvariables, as in the seminal Altman (1968) study, can ignore very important factors andpossibilities (Woellert and Kopecki, 2008). While some have suggested that the modelsonly need to be improved (NewScientist, 2008b), all statistical models are subject to theproblems of spurious correlations between variables that are magnified as the number ofvariables are increased, and so it is questionable whether credit analysis can ever be conducted without some human judgment.Existing mathematical credit risk models have “a tendency to underestimate theli kelihood of sudden large events” (Buchanan, 2008) that are especially important in thecredit markets where the tail of a distribution is key in predicting the defaults that typically have a low probability of occurrence (Murphy, 2000). The mathematical modelstypically fail to consider inter-related systematic risks (Jameson, 2008), and they tend tomake unrealistic assumptions such as markets always being in equilibrium (NewScientist,2008a). Despite their “poor risk modeling” in actuality (Jameson, 2008), the statistical accuracy of the models in predicting backward into the past (using historic data) resultedin the mathematical modelers developing such a “faith in their models” in forecasting the4future that they began to “to ignore what was happening in the real world” (NewScientist,2008b).In addition, without human judgment, financial models of credit risk are subject to manipulation, both legally and fraudulently. Just for instance, the modeling predictions atthe rating agencies have, at least recently, been biased toward granting higher ratings thanmerited in order to compete for revenues from the debtors who pay to be rated and are a“colossal failure” (Burns, 2008). The result has been that a large portion of the credit default swaps were mispriced.The mortgage crisis itself may have largely been caused by the mispricing ofcredit default swaps. A major contributor to the lack of subjective judgment and verification of the model inputs was the fact that mortgage brokers were motivated by loan origination commissions to just maximize the volume of issued mortgages thatrequired no money down and no proof of income because the risks associated with suchlending policies were “blurred” to the final investors who took positions in them throughcollateralized debt obligations or CDOs (Buchanan, 2008). One factor causing CDO investors to accept such uncertainties may very well have been that such mortgagebackedsecurities were widely insured against losses from default by insurers like AIG,wh ich itself placed “blind faith in financial risk models” and their small elite staff of modelers who initially generated large income for the firm that later turned into decimating losses (Morgenson, 2008). AIG‟s modelers likely justified their pricing by applying purely statistical credit scoring procedures using a limited number of factors thatdidn‟t incorporate the effects of requiring no documentation for the inputs to the models5and having no human credit analyst to provide a subjective judgment. In many cases, theunverified inputs to the models were even widely recognized to be false or misleading.1In addition, many of the more sophisticated mathematical models of debt instruments were based on theories that implied the systematic risks of debts could be hedged or diversified away (Duffee, 1999). As a result, many modelers questioned the need to require any yield compensation for systematic risks (Elton, Gruber, Agrawal, andMann, 2001) that debt investors normally receive because the risks of debt investmentscan‟t be fully diversified away (Murphy, 2000). Unfortunately, the theories that indicatedebt investors only need to charge sufficient interest to cover expected default losses arebased on unrealistic assumptions, such as no transaction costs and a continuous distribution of returns (Merton, 1974). As a result, their conclusions are invalid despitethe accuracy of their mathematics.Such modeling procedures resulted in many credit default swaps being priced to have the periodic payment compensate the insuring party for average default losses. Without the extra yield cushion that normally is required to cover the systematically above-average default losses that inevitably occur in some years, debt investors had setthemselves up for large losses at some point. With many of the insuring parties of creditdefault swaps being banks and other financial institutions that were highly leveragedlarge current obligations, suffering losses created the risk of these insurers defaulting ontheir own obligations under the credit default swaps,2 leading to a potential domino effecton their swap counterparties and a systematic cascade of defaults.6Compounding the problem of failing to charge a systematic risk premium in the credit default swaps was the previously mentioned problem of underestimating even average default losses because of the failure to utilize subjective human judgment in thestatistical modeling of default risk. The result was that the payments on credit default swaps didn‟t even c over future default losses in average years.Such under-pricing of credit default swaps resulted in a credit bubble, as investors hedged their debt investments with the insurance of the credit default swaps to reduce their risk at abnormally low costs and drive up debt prices. As a result, investors were able to borrow at extremely low premiums to default-free U.S. Treasury rates for severalyears (as indicated by the very low spreads between Treasury yields and corporate debtyields, especially junk yields, until 2007 that were readily observed daily in the financialpress like the Wall Street Journal).For a while, the recipients of the periodic insurance payment on the credit default swaps were able to generate large profits from the contracts, as defaults were initially lower than the insurance payments. That situation was especially prevalent in the mortgage market because newly issued mortgages generally default at lower rates thanmore seasoned ones. In addition, many of the newly originated mortgages had adjustablerates that offered a low teaser payment for the first 1-5 years of the loan before they werecontracted to rise according to a formula based on market rates of interest, and default rates naturally rise with such adjustable-rate mortgages (ARMs) over time. However, given that no systematic risk premium was being charged, and given that the default riskpremium was less than the default losses that would be estimated by expert human credit7analysts, the profits were almost certain to turn into losses as soon as defaults rose to a more normal level.The Foreclosure CatalystIn fact, default losses on subprime mortgages began to exceed expected default losses in 2007. One of the reasons for the rise in mortgage defaults was the increase ininterest rates charged on the loans that had been set at introductory teaser rates which were contractually raised to market levels after the introductory period (ranging between1 and 5 years) expired. The resulting foreclosures brought an excess supply of homes onto the market that caused residential real estate prices to fall, contributing to further mortgage defaults. As the market value of mortgages fell, the viability of many banks andother financial institutions was called into question, resulting in a wholesale bank run thatrequired the Federal Reserve to bailout the system with several hundred billion dollars inliquidity in the summer of 2007.As investors began to perceive that defaults could spread beyond mortgages, the systematic risk premiums began to rise across all debt instruments, resulting in a fall indebt prices across the board. Systematically falling debt prices led to further increases inperceived systematic risk and further increases in systematic risk premiums in a cycle that brought us to the 2008 financial crisis.The Liquidity Crisis8Exasperating the cycle along the way were the failures of several large financial institutions such as Bear Stearns, Freddie Mac,3 Fannie Mae, Lehman Brothers, and AIG.These failures were related to the investments of those institutions into debt contracts ofvarious types that had fallen in value to the point where their liabilities exceeded the market value of their assets. In some cases, such as that of Bear Stearns, there was also aliquidity crisis, insofar as the market value of the liability of that investment bank on itsmassive portfolio of credit default swaps began to rise so much that the counterparty wasable to demand additional collateral be put up as security against payment on the creditdefault swaps.4A similar liquidity crisis later ensued at AIG, with that insurance company having insured a massive amount of collateralized mortgage obligations. As previously explained, much of the mortgage crisis may be attributed to AIG and other insurers of mortgage paper like AMBAC and MBNA. In particular, many of the subprime mortgagesmay never have been originated and packaged into pools if there hadn‟t been an agreement by the insurance companies to guarantee the mortgage-backed securities withspecified characteristics against default. The premiums charged on the credit default swaps do not appear to have provided sufficient compensation for the higher default rateson mortgages with lower (or no) down payments, especially when no documentation wasrequired and no human credit analysis was undertaken.The problem of under-pricing the insurance payments on credit default swapsmay have been at least partially exasperated by the mathematical models of the insurersnot fully allowing for the rising defaults that normally occur on adjustable rate mortgagesas the interest rate rises following initially low teaser rates. Unrealistic expectations of 9ever-rising home prices that would enable refinancing mortgages when the introductoryteaser rates rose after a few years may have also contributed. Although the existence ofevidence of a possible bubble top in real estate prices at that time (Shiller, 2005) wouldmake the latter expectations appear to be especially implausible, AIG was able to recordlarge profits from its insurance scheme until those higher default rates materialized (Morgenson, 2008).As more institutions failed, market risk premiums rose ever further, leading to further calls for collateral on firms that were receiving the periodic payments on credit default swaps. The resulting liquidity squeeze can cause more defaults and market riskpremiums rising ever farther in a vicious cycle without interventions by the Federal Reserve to supply needed cash. Nevertheless, despite the Fed‟s ma ssive efforts to date,credit risk premiums rose to over 8% on a leading index of credit default swaps (Mosesand Harrington, 2008).The Size of the ProblemDespite the enormous amount already spent by the federal government to bailoutthe financial markets, much more may be needed to save the system as it is. In particular,assuming the average debt for the $62 trillion in credit default swaps merited a Baa creditrating, and assuming credit risk premiums being charged that equaled only 2/3 that of theexpected default losses on those credits, data provided in Murphy (2000) indicate that thecontracted under-pricing was {{1/3}0.33%)+1.35%=1.46% per year. That comes to amarket value loss of .0146x$62 trillion=$ per year, or about $5 trillion over the typical 5-10year life of a credit default swap. Those huge market value losses exist even though initially the premium of 0.22% on the credit default swaps may have exceeded the typicalabnormally low default losses on ARMs shortly after origination. While there may havebeen some hedging or offsetting contracts that would reduce the scope of the cost of a fullbailout, it is unclear how large an offset that would be.In addition, it should also be mentioned that the premiums charged for the credit default swaps in no event covered the abnormally large default losses that periodically occur during recessions. With the financial crisis likely to result in such a downturn, thelosses on the credit default swaps are likely to be even larger for the duration of that recession. That could easily raise the cost of a bailout by over $1 trillion per year of aneconomic slowdown. Since the very existence of the financial crisis may negatively affect the economy through reduced consumer spending (caused by the uncertainty) anddecreased bank lending (caused by rising credit risk and credit risk premiums), such additional costs may be further magnified by a more severe and protracted recession. Thetotal cost of the crisis could exceed $10 trillion.5Possible Solutions to the CrisisThere are perhaps other solutions to the crisis besides a massive bailout of the markets. One simple policy would be to nationalize the depository institutions of the failed corporate holding companies, and simply let the holding companies and all otherfailed institutions go bankrupt and default on their credit default swaps. The nationalizedbanks could then go back to making loans as they did in the old days, having real human11beings make credit-granting decisions. The cost of this policy to taxpayers might be rather small, especially since most of the losses on the defaulting credit default swaps would either be offsetting or be incurred by investors like hedge funds.For institutions suffering strictly from a liquidity crisis but having a firm value in excess of their liabilities, simple enforcement of the regulations on short sales might be ofgreat assistance. In particular, as shown theoretically and empirically by Murphy, Callaghan, and Parkash (2005), companies with inadequate internal liquidity can have their stock price shorted down to zero and then be totally unable to access the capitalmarkets, thereby resulting in the failure of the firm. To inhibit such shorting down of value, the illegal “naked” shorting that is concentrated in fo reign markets but also goeson in the U.S. because of inadequate enforcement by clearing agents (Boni, 2006) couldbe prevented by having the SEC start to enforce the laws requiring delivery of borrowedshares by short sellers. Since there is an estimated $1 trillion in illegal “naked” short sales(Financial Wire, 2004), which have been alleged to be related to the activities of organized crime (Weiss, 1997),6 enforcing the requirement that short sellers deliver securities they sell like any other seller would result in a short squeeze that would sendstock market prices soaring, as those short sellers had to buy back the securities they soldto deliver the shares they had never borrowed.7 Most importantly, however, such a policywould inhibit the bankruptcy of the thousands of firms that have been shorted out of existence (Financial Wire, 2005) simply because of a short-term liquidity crisis.The real estate and mortgage crisis itself could possibly be resolved by allowing defaulting mortgagors to refinance with shared appreciation mortgages (SAMs) that would lower their payments in return for the lending institution receiving a share in the12future appreciation on the home (Murphy, 2007). The SAMs could possibly be standardized to both reduce legal costs and also potentially create a secondary market forthem in the form of SAM pools in which investors seeking diversification into residentialreal estate might be interested. By replacing foreclosure solutions with SAMs, less homeswould be put on the market for sale, thereby reducing the downward pressure on real estate prices. The cycle of falling real estate prices leading to more mortgage defaults andforeclosures, which cause further drops in real estate prices that prompt more foreclosures, might therefore not only be stopped but even reversed.ConclusionBy analyzing the root causes of the financial crisis, it is possible to estimate the costs of resolving that crisis utilizing current policies of bailing out investors who madepoor investment decisions. Although the cost of the bailout may be staggering, cheapersolutions appear to exist. In any event, it would seem imperative that the financial managers of the future be better educated in the art of credit analysis.Endnotes1. The huge market for Alternative-A or “liar loans” that required no documentation of income or assets but generated large fees for mortgage bankers, who sold them to other investors (Zibel, 2008), may never have existed without such guarantees.2. Callaghan and Murphy (1998) have shown that bankruptcy is typically caused by liquidity problems when external capital is typically not available. Murphy, Callaghan, and Parkash (2005) have demonstrated theoretically and empirically why external capital isn‟t available during liquidity crises.3. The failures of the two federal agencies were preceded in 2005 by a successful $2 million campaign by Freddie Mac to lobby Congress from restricting their own investments in higher-risk mortgages (Yost, 2008).134. The required posting of additional collateral when the market value of a swap contract becomes negative to a counterparty minimizes the risks associated with that counterparty going bankrupt and not fulfilling the terms of the contract. The risk of a domino effect remains, however, insofar as one large institution failing can lead to defaults on obligations without collateral requirements that can resultin losses to other institutions which might thereby be driven into bankruptcy.Such losses can exist on all over-the-counter trades with brokers and dealers that are not performed through the regulated markets like the futures and stock exchanges (Collins and McMahon, 2008).5. The actual costs of the bailout will vary with the various methods employed. These include payoffs on the debts that are guaranteed by the government (suchas those of rescued bankrupt firms and mortgages in default), losses resultingfrom buying up assets privately or in the markets (such as mortgage-backed securities), and losses on financing provided to bankrupt firms to keep them afloat (that provide inadequate returns to the government in comparison to those available on other assets of similar risk).6. The extensive resources an international criminal consortium dominated by emigrants from the former Soviet Union has allocated to financial market manipulation since the 1991 overthrow of communism there (Friedman, 2000) may be connected to the increase in both the complaints and the significance ofthe illegal naked shorting. The fact that many of the naked short sales are currently rumored to emanate in some form from unauthorized USA stock listings on the Berlin Stock Exchange (Koh, 2005), which promotes itself (e.g., in its brochure entitled “Boerse Berlin Bremen” under the heading “Schwerpunkte des internationalen Angebots) as listing more U.S. stocks than any other foreign exchange in the world and having market makers with connections to Eastern Europe, also supports this very tentative hypothesis, albeit only circumstantially. 7. In an attempt to mitigate the financial crisis, the SEC began in late September 2008 to temporarily restrict short selling of financial service stocks by inhibiting brokers from initiating new short positions unless they delivered shares against existing short positions, thereby requiring short sellers such as hedge funds to switched to shorting other stocks and thus leading to no overall benefit to thestock market (Favel, 2008). Although short selling illiquid companies out of business can occur with traditional legal short selling and synthetic short positions via the option exchanges (Murphy, Callaghan, and Parkash, 2008), the costs of holding legal short positions can become extremely high with heavy shorting activity (Jones and Lamont, 2002). Since heavy shorting activity might be likely when the stock values of viable companies short of cash are manipulated down, ending the naked shorting might lead to especially large inhibitions on manipulative shorting activities. It is interesting in this context to observe thatthere had been one effort to impose delivery requirements on September 18, 2008, and the result was the stock market rose substantially at the end of that day asmany shorts were squeezed to buy back to cover their naked positions (eventhough it doesn‟t appear that there was full compliance). In any event, the14enforcement of the rules apparently was reduced in scope on the following day to only financial service stocks for reasons that are not completely clear. Complaints from hedge funds (and their brokers), which were finding spreads in the market soaring to as high as 700% as a result of the short squeeze, may have resulted inso many complaints (Favel, 2008) and outright refusals to buy back at such coststhat the SEC backed off from enforcing the delivery rules.ReferencesE. Altman. “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy.” Journal of Finance 23 (1968), 589-609.J. Aversa. “Fed Eyes Plan to Fund Short-Term Business Loans.” Associated Press (October 7, 2008).Boni, L., 2006. Strategic Delivery Failures in U.S. Equity Markets. Journal of FinancialMarkets 9, 1-26.M. Buchanan. “Crazy Money.” NewScientist (July 19, 2008), 32-35.J. Burns. “Former Ratings-Firm Officials Blame Conflicts for Rosy Views.” Wall StreetJournal (October 23, 2008), A4.J. Callaghan and A. Murphy. "An Empirical Test of a Stochastic Cash Flow Theory of Evaluating Credit." Advances in Financial Planning and Forecasting 8 (1998), 31-51.D. Collins and C. McMahon. “Great Bailout of 2008: What‟s Next.” Futures (November2008), 28-36.F. Duffee. “Estimating the Price of Default Risk.” Review of Financial Studies 12 (1999),197-226.E. Elton, M. Gruber, D. Agrawal, and C. Mann. “Explaining the Rate Spread on Corporate Bonds.” Journal of Finance 56 (2001), 247-277.G. Favel. “Sold Short.” Futures (November 2008), 32.FinancialWire. “StockGate: The Tune May Have Changed, But the Song is the Same.”Investors Business Daily (June 25, 2004).FinancialWire, 2005. “Regulation SHO Gets Confuser and Co nfuser as Listing …Disappear‟.” Investors Business Daily (January 28, 2005).M. Glantz and J. Mun. The Banker’s Handbook on Credit Risk. Elsevier: Burlington (2008).B. Jameson. “The Blunders that Led to Catastrophe.” NewScientist (September 27, 2008),8-9.C. Jones and O. Lamont. “Short-sales Constraints and Stock Returns.” Journal of Financial Economics 66 (2002), 207-239.15P. Koh. “Stung by the German Connection.”: Euromoney (April 1, 2005), 1.R. Merton. “On the Pricing of Corporate Debt: A Further Note.” Journal of Finance 29(1974), 449-470.G. Morgenson. “Behind Insurer‟s Crisis: Blind Eye to a Web of Risk.” New York Times(September 28, 2008).C. Morris. “Fed's $1.6 Trillon Bet: The $700-Billion Wall Street Bailout Was Only theHalf of It.” Washington Independent (October 14, 2008).A. Moses and S. Harrington. “Company Bond Risk Surges on Argentina Default Concerns.”Bloomberg (October 23, 2008).A. Murphy. “A Discounted Cash-Flow Model of Fixed-Income Securities Subject to Multiple Calls." Southern Economic Journal 55 (1988), 21-36.A. Murphy. Scientific Investment Analysis. Quorum Books: Westport (2000).A. Murphy, J. Callaghan, and M. Parkash. “Shorting Down Value.” Presented at the 2005Southern Finance Association (SFA) conference.A. Murphy. “An Analysis of SAM Pricing in the UK.” Presented at the 2007 EuropeanFinancial Management Association (EFMA) meeting.NewScientist. “Crunchonomics.” July 19 (2008a), 5.NewScientist. “Blinded by Science.” September 27 (2008b), 5.PIA Connection. “Congress Exempted Credit Default Swaps from State Gaming Laws in2000.” October 15 (2008).R. Shiller. “Homes are a Risky Long-Term Investment.” TIAA-CREF (Summer 2005), 19-22.E. Simon. “Meltdown 101: What are Credit Default Swaps?” Kansas City Star (October26, 2008).Weiss, G. “The Mob is Busier than the Feds Think.” Business Week (December 15, 1997), 130.。
2008年6月ACCA P6答案
Professional Level –Options Module, Paper P6 (UK)Advanced Taxation (United Kingdom)June 2008 Answers1MemorandumTo Tax managerFrom Tax assistantDate 2 June 2008Subject Saturn Ltd group of companiesThis memorandum considers a number of issues raised by Daniel Dare (DD), the managing director of Saturn Ltd.(a)(i)Dione Ltd – Value of tax loss–Any amount of the loss can be surrendered to the UK resident members of the 75% loss group, i.e. Saturn Ltd and Rhea Ltd.–The maximum tax saving will be obtained by offsetting the loss against profits between the limits for the small companies rate of corporation tax. The limits are divided by four as there are four associated companies (Titan Incis included as overseas companies are associated for the purposes of determining the rate of corporation tax).Accordingly, for the year ending 30 June 2008 the limits are £75,000 and £375,000.–The maximum tax saving will be achieved by surrendering the loss to Saturn Ltd. The first £10,000 of loss will relieve profits at the full rate of tax and the balance of the loss will save tax at 32·5%. Surrendering the loss toRhea Ltd would only save tax at 30%.–The dividend received by Saturn Ltd does not affect its corporation tax liability. Dividends received from UK resident companies are not subject to corporation tax and dividends received from a 51% subsidiary are not frankedinvestment income.–The corporation tax saved via the offset of the loss will be £60,525 ((£10,000 x 30%) + (£177,000 x 32·5%)).–The claim must be submitted by 30 June 2010 (one year after the filing date of the corporation tax return).Further information required:–Income and gains of Dione Ltd for the year ended 30 June 2007The loss could be carried back for offset against the total profits of Dione Ltd for the year ended 30 June 2007.Whether or not this would be advantageous would depend on the company’s total profits for that year. Althoughthe maximum additional tax saving would be very small, there would be a cashflow benefit.(ii)Tethys Ltd –Use of trading loss–The two companies will not be in a group relief group as Saturn Ltd will not own 75% of T ethys Ltd.–For a consortium to exist, 75% of the ordinary share capital of T ethys Ltd must be held by companies which each hold at least 5%. Accordingly, T ethys Ltd will be a consortium company if the balance of its share capital is ownedby Clangers Ltd but not if it is owned by Edith Clanger.–If T ethys Ltd qualifies as a consortium company: 65% of its trading losses in the period from 1 August 2008 to31 December 2008 can be surrendered to Saturn Ltd, i.e. £21,667 (£80,000 x 5/12 x 65%).–If T ethys Ltd does not qualify as a consortium company: none of its loss can be surrendered to Saturn Ltd.–The acquisition of 65% of T ethys Ltd is a change in ownership of the company. If there is a major change in the nature or conduct of the trade of T ethys Ltd within three years of 1 August 2008, the loss arising prior to that datecannot be carried forward for relief in the future.Further information required:–Ownership of the balance of the share capital of T ethys Ltd.(iii)Tethys Ltd –Sale of the manufacturing premisesValue added tax (VAT)–The building is not a new building (i.e. it is more than three years old). Accordingly, the sale of the building is an exempt supply and VAT should not be charged unless T ethys Ltd has opted to tax the building in the past.T axable profits on sale–There will be no balancing adjustment in respect of industrial building allowances as the building is to be sold on or after 21 March 2007.–The capital gain arising on the sale of the building will be £97,760 (£240,000 – (£112,000 x 1·27)).Rollover relief–T ethys Ltd is not in a capital gains group with Saturn Ltd. Accordingly, rollover relief will only be available if T ethys Ltd, rather than any of the other Saturn Ltd group companies, acquires sufficient qualifying business assets.–The amount of sales proceeds not spent in the qualifying period is chargeable, i.e. £40,000 (£240,000 –£200,000). The balance of the gain, £57,760 (£97,760 – £40,000), can be rolled over.–Qualifying business assets include land and buildings and fixed plant and machinery. The assets must be brought into immediate use in the company’s trade.–The assets must be acquired in the four-year period beginning one year prior to the sale of the manufacturing premises.Further information required:–Whether or not T ethys Ltd has opted to tax the building in the past for the purposes of VAT.(iv)Stamp duty and stamp duty land tax–The purchase of T ethys Ltd will give rise to a liability to ad valorem stamp duty of £1,175 (£235,000 x 0·5%).The stamp duty must be paid by Saturn Ltd within 30 days of the share transfer in order to avoid interest beingcharged. It is not an allowable expense for the purposes of corporation tax.(b)Before agreeing to become tax advisers to the Saturn Ltd groupInformation needed:–Proof of incorporation and primary business address and registered office.–The structure, directors and shareholders of the company.–The identities of those persons instructing the firm on behalf of the company and those persons that are authorised to do so.Action to take:–Consider whether becoming tax advisers to the Saturn Ltd group would create any threats to compliance with the fundamental principles of professional ethics, for example integrity and professional competence. Where such threatsexist, we should not accept the appointment unless the threats can be reduced to an acceptable level via theimplementation of safeguards.–Contact the existing tax adviser in order to ensure that there has been no action by the Saturn Ltd group that would, on ethical grounds, preclude us from accepting appointment.2(a)John and Maureen Robinson – Additional tax payableAdditional income tax payable – 2005/06££2,550 x 22% (property income (W1))5611,587 x 20% (interest income (W1))317–––––4,137 (remainder of basic rate band (W2))–––––1,443 x 40% (interest income (£3,030 – £1,587))5779,840 x 32·5% (dividend income (W1))3,198–––––––4,653 Less:T ax credits£3,030 x 20%(606)£9,840 x 10%(984)–––––––3,063 T ax paid by Maureen (W3)(561)–––––––Additional income tax payable2,502–––––––Additional capital gains tax payable – 2005/06£Chargeable gain13,470Annual exemption(9,200)–––––––T axable gain4,270–––––––Additional capital gains tax payable (£4,270 x (40% – 20%)) (Note)854–––––––Note: The taxable gain fell into Maureen’s basic rate band but will now be taxed at 40% in John’s hands.Tutorial noteThe gift of the property to Maureen would not be effective for capital gains tax purposes due to the prior agreement whereby Maureen gave the sales proceeds to John.Additional income tax payable – 2006/07££393 x 20% (interest income (W1))79––––––393 (remainder of basic rate band (W2))––––––2,827 x 40% (interest income (£3,220 – £393))1,131144 x 40% (interest income – Penny (W1))5810,120 x 32.5% (dividend income (W1))3,289––––––4,557Less:T ax credits£3,220 x 20%(644)£10,120 x 10%(1,012)––––––2,901T ax paid by Maureen (W4)(473)––––––Additional income tax payable2,428––––––T otal additional tax payable (£2,502 + £854 + £2,428)5,784––––––Workings1.John – Additional taxable income2005/062006/07££Arising on inherited assets:Property income2,550–Interest income (£2,424/£2,576 x 100/80)3,0303,220Dividend income (£8,856/£9,108 x 100/90)9,84010,120 Children’s bank accounts:Will – below de minimis limit of £100––Penny –1442.John – Remainder of basic rate band2005/062006/07££Salary29,40030,500Car benefit:15 + (185 – 140)/5 = 24%£17,400 x 24% x 8/122,784£17,400 x 24%4,176 Fuel benefit:£14,400 x 24% x 8/122,304£14,400 x 24%3,456 T rust income (£720/£780 x 100/60)1,2001,300Less:Personal allowance(5,225)(5,225)––––––––––––––30,46334,207 Basic rate band34,60034,600––––––––––––––Remainder of basic rate band4,137393––––––––––––––3.Maureen – T ax paid on investment income 2005/06£T rading income (W5)11,845Property income 2,550Interest income (W1)3,030Dividend income (W1)9,840–––––––27,265 Less:Personal allowance(5,225)–––––––T axable income22,040–––––––T ax on property income (Note)£2,550 x 22%561–––––––Note:All of the investment income fell into the basic rate band. The tax liability in respect of the interest and dividend income was covered by the related tax credits. Accordingly, in respect of the income arising on the inherited assets, only the property income gave rise to income tax payable.4.Maureen – T ax paid on investment income 2006/07£T rading income (W5)28,590Interest income (W1)3,220Dividend income (W1)10,120–––––––41,930Less:Personal allowance(5,225)–––––––T axable income36,705–––––––T ax on dividend income in higher rate band (Note)£2,105 x 32·5%684Less:T ax credit£2,105 x 10%(211)–––––––473–––––––Note:The tax liability in respect of the investment income that fell into the basic rate band was covered by the related tax credits. Accordingly, income tax was payable in respect of the dividend income that fell into the higher rateband only, i.e. £2,105 (£36,705 – £34,600).5.Maureen – T rading incomePeriod ended Year ended30 September 200630 September 2007££Adjusted trading profit28,40031,240Less:Capital allowances (£5,850 x 40%)(2,340)(£5,850 – £2,340) x 25%(878)––––––––––––––26,06030,362––––––––––––––2005/061 November 2005 to 5 April 2006 (£26,060 x 5/11)11,845–––––––2006/071 November 2005 to 31 October 20061 November 2005 to 30 September 200626,0601 October 2006 to 31 October 2006 (£30,362 x 1/12)2,530–––––––28,590–––––––(b)Advice on Maureen’s VAT positionDeregistrationIn order to voluntarily deregister for VAT you must satisfy HMRC that the value of your taxable supplies in the next twelve months will not exceed £62,000. You will then be deregistered with effect from the date of your request or a later date as agreed with HMRC.On deregistering you are regarded as making a supply of all stocks and equipment in respect of which input tax has been claimed. However, the VAT on this deemed supply need only be paid to HMRC if it exceeds £1,000.Once you have deregistered, you must no longer charge VAT on your sales. You will also be unable to recover the input tax on the costs incurred by your business. Instead, the VAT you pay on your costs will be allowable when computing your taxable profits.You should monitor your sales on a monthly basis; if your sales in a twelve-month period exceed £64,000 you must notify HMRC within the 30 days following the end of the twelve-month period. You will be registered from the end of the month following the end of the twelve-month period.Flat rate schemeRather than deregistering you may wish to consider operating the flat rate scheme. This would reduce the amount of administration as you would no longer need to record and claim input tax in respect of the costs incurred by your business.Under the flat rate scheme you would continue to charge your customers VAT in the way that you do at the moment. You would then pay HMRC a fixed percentage of your VAT inclusive turnover each quarter rather than calculating output tax less input tax. This may be financially advantageous as compared with deregistering; I would be happy to prepare calculations for you if you wish.3(a)Spica(i)The most beneficial tax treatment of the payment receivedThe payment received by Spica will be treated as either an income distribution or as capital.Income treatment£Payment received (8,000 x £8)64,000Less:Original subscription price (8,000 x £1·90)(15,200)––––––––Distribution48,800––––––––T axable dividend income (£48,800 x 100/90)54,222Less:Personal allowance(5,225)––––––––T axable income48,997––––––––Income tax£34,600 x 10%3,46014,397 x 32·5%4,679–––––––48,997–––––––––––––––8,139Less:Income tax credit (£54,222 x 10%)(5,422)––––––––Income tax payable2,717––––––––Tutorial noteA capital loss of £800 [8,000 x (£2·00 –£1·90)] will also arise. Spica cannot claim to offset this capital loss againstincome as she did not subscribe for the shares.Capital treatment£Sales proceeds (8,000 x £8)64,000Less:Cost (8,000 x £2)(16,000)––––––––48,000––––––––The shares are business assets that have been owned for more than two years.T axable gains (£48,000 x 25%)12,000Less:Remainder of the annual exemption (£9,200 – £3,800)(5,400)––––––––6,600––––––––Capital gains tax£2,230 x 10%2234,370 x 20%874––––––6,600––––––––––––––Capital gains tax payable1,097––––––––The capital treatment gives rise to the lower tax liability.(ii)Ensuring capital treatmentFor the capital treatment to apply, a number of conditions need to be satisfied such that the following points need to beconfirmed.–The business of Acrux Ltd consists wholly or mainly of the carrying on of a trade as opposed to the making of investments.–Spica is UK resident and ordinarily resident despite living in both the UK and Solaris.–The transaction is being carried out for the purpose of the company’s trade and is not part of a scheme intended to avoid tax. This is likely to be the case as HMRC accept that a management disagreement over the running ofthe company has an adverse effect on the running of the business.I n addition, Spica must have owned the shares for at least five years so the transaction must not take place until1 October 2008.(b)Rate of tax on profits of non-UK resident investee companiesUndistributed profitsThe companies will be subject to tax in the countries in which they are resident; this is because of their residency status or because they have a permanent establishment in that country. Undistributed profits will not be taxed in the UK.The rate of tax on undistributed profits will therefore be the rate of tax in the country of residency of the respective companies.Distributed profits with double tax treatyThe dividends received by Acrux Ltd from each of the overseas companies will be grossed up in respect of underlying tax (the overseas corporation tax paid on the distributed profits) because Acrux Ltd will own at least 10% of the overseas companies.The gross amount will then be included in Acrux Ltd’s profits chargeable to corporation tax.The treaty will provide double tax relief in the UK for the overseas tax suffered in respect of each dividend up to a maximum of the UK tax on the grossed up overseas dividend. As a result of the double tax relief, the overall rate of tax suffered will be the higher of the UK rate paid by Acrux Ltd and the overseas tax rate borne by the overseas company.Where the rate of overseas tax in respect of a particular dividend exceeds the rate of corporation tax in the UK, excess foreign tax will arise. This can be relieved, via onshore pooling, against the UK tax due on those dividends where the rate of tax in the UK exceeds the rate overseas. This will reduce the overall rate of tax suffered on the total overseas profits of the overseas companies as a whole.Distributed profits with no double tax treatyWhere there is no double tax treaty, unilateral double tax relief will be available in the UK. This relief will operate in the same way as double tax relief under a double tax treaty such that the overall rate of tax on each dividend will be the higher of the UK rate paid by Acrux Ltd and the overseas rate borne by the overseas company. Relief via onshore pooling will also be available.4(a)(i)Galileo – Inheritance tax payableThe gift of shares to Galileo was a potentially exempt transfer. It has become chargeable due to Kepler’s death withinseven years of the gift.£Value of Kepler’s holding prior to the gift to Galileo (2,000 x £485)970,000Less:Value of Kepler’s holding after the gift (1,400 x £310)(434,000)–––––––––536,000Business property relief (W1)(367,843)Less:Annual exemption 2004/05(3,000)Less:Annual exemption 2003/04 (£3,000 – (£900 x 2))(1,200)–––––––––163,957Available nil rate band (£300,000 –(£298,000 – £6,000)(8,000)–––––––––155,957–––––––––Inheritance tax at 40%62,383T aper relief (3–4 years) (£62,383 x 20%)(12,477)–––––––––Inheritance tax payable49,906–––––––––The inheritance tax payable in respect of the shares in the death estate will be paid by the executors and borne byHerschel, the residuary legatee. None of the tax will be payable by Galileo.Workings1Business property relief£536,000 x 100% x (£1,050,000/£1,530,000) (W2)£367,8432Excepted assets and total assets££Total Non-exceptedassets assetsPremises900,000900,000Surplus land480,000–Vehicles100,000100,000Current assets50,00050,000––––––––––––––––––––1,530,0001,050,000––––––––––––––––––––(ii)Payment by instalmentsThe inheritance tax can be paid by instalments because Messier Ltd is an unquoted company controlled by Kepler atthe time of the gift and is still unquoted at the time of his death.The tax is due in ten equal annual instalments starting on 30 November 2008.Interest will be charged on any instalments paid late; otherwise the instalments will be interest free because Messier isa trading company that does not deal in property or financial assets.All of the outstanding inheritance tax will become payable if Galileo sells the shares in Messier Ltd.Tutorial noteCandidates were also given credit for stating that payment by instalments is available because the shares represent atleast 10% of the company’s share capital and are valued at £20,000 or more.(b)Minimising capital gains tax on the sale of the paintingsGalileo will become resident and ordinarily resident from the date he arrives in the UK as he intends to stay for more than three years. Prior to that date he will be neither resident nor ordinarily resident such that he will not be subject to UK capital gains tax.Galileo should sell the paintings before he leaves Astronomeria; this will avoid UK capital gains tax completely.Tutorial noteThe gains would be taxable on the remittance basis if the paintings were sold after Galileo’s arrival in the UK. However, this would not help Galileo to minimise the capital gains tax due as he needs to bring the sales proceeds into the UK in order to purchase a house.(c)(i)Relocation costsDirect assistanceMessier Ltd can bear the cost of certain qualifying relocation costs of Galileo up to a maximum of £8,000 withoutincreasing his UK income tax liability. Qualifying costs include the legal, professional and other fees in relation to thepurchase of a house, the costs of travelling to the UK and the cost of transporting his belongings. The costs must beincurred before the end of the tax year following the year of the relocation, i.e. by 5 April 2010.Assistance in the form of a loanMessier Ltd can provide Galileo with an interest-free loan of up to £5,000 without giving rise to any UK income tax.(ii)Tax-free accommodationIt is not possible for Messier Ltd to provide Galileo with tax-free accommodation. The provision of accommodation by anemployer to an employee will give rise to a taxable benefit unless it is:–necessary for the proper performance of the employee’s duties, e.g. a caretaker; or–for the better performance of the employee’s duties and customary, e.g. a hotel manager; or–part of arrangements arising out of threats to the employee’s security, e.g. a government minister.As a manager of Messier Ltd Galileo is unable to satisfy any of the above conditions.5(a)(i)The tax incentives immediately availableIncome tax–The investor’s income tax liability for 2008/09 will be reduced by 20% of the amount subscribed for the shares.–Up to half of the amount invested can be treated as if paid in 2007/08 rather than 2008/09. This is subject to a maximum carryback of £50,000.This ability to carryback relief to the previous year is useful where the investor’s income in 2008/09 is insufficientto absorb all of the relief available.Tutorial noteThere would be no change to the income tax liability of 2007/08 where an amount is treated as if paid in that year.This ensures that such a claim does not affect payments on account under the self assessment system. Instead, thetax refund due is calculated by reference to 2007/08 but is deducted from the next payment of tax due from thetaxpayer or is repaid to the taxpayer.Capital gains tax deferral–For every £1 invested in Vostok Ltd, an investor can defer £1 of capital gain and thus, potentially, 40 pence of capital gains tax.–The gain deferred can be in respect of the disposal of any asset.–The shares must be subscribed for within the four year period starting one year prior to the date on which the disposal giving rise to the gain took place.(ii)Answers to questions from potential investorsMaximum investment–For the relief to be available, a shareholder (together with spouse and children) cannot own more than 30% of the company. Accordingly, the maximum investment by a single subscriber will be £315,000 (15,000 x £21).Borrowing to finance the purchase–There would normally be tax relief for the interest paid on a loan taken out to acquire shares in a close company such as Vostok Ltd. However, this relief is not available when the shares qualify for relief under the enterpriseinvestment scheme.Implications of a subscriber selling the shares in Vostok Ltd–The income tax relief will be withdrawn if the shares in Vostok Ltd are sold within three years of subscription.–Any profit arising on the sale of the shares in Vostok Ltd on which income tax relief has been given will be exempt from capital gains tax provided the shares have been held for three years.–Any capital loss arising on the sale of the shares will be allowable regardless of how long the shares have been held. However, the loss will be reduced by the amount of income tax relief obtained in respect of the investment.The loss may be used to reduce the investor’s taxable income, and hence his income tax liability, for the tax yearof loss and/or the preceding tax year.–Any gain deferred at the time of subscription will become chargeable in the year in which the shares in Vostok Ltd are sold.(b)Recoverable input tax in respect of new premisesVostok Ltd will recover £47,880 (£446,500 x 7/47 x 72%) in the year ending 31 March 2009.The capital goods scheme will apply to the purchase of the building because it is to cost more than £250,000. Under the scheme, the total amount of input tax recovered reflects the use of the building over the period of ownership, up to a maximum of ten years, rather than merely the year of purchase.Further input tax will be recovered in future years as the percentage of exempt supplies falls. (If the percentage of exempt supplies were to rise, Vostok Ltd would have to repay input tax to HMRC.)The additional recoverable input tax will be computed by reference to the percentage of taxable supplies in each year including the year of sale. For example, if the percentage of taxable supplies in a particular subsequent year were to be 80%, the additional recoverable input tax would be computed as follows.£446,500 x 7/47 x 1/10 x (80% – 72%) = £532.Further input tax will be recovered in the year of sale as if Vostok Ltd’s supplies in the remaining years of the ten-year period are fully vatable. For example, if the building is sold in year seven, the additional recoverable amount for the remaining three years will be calculated as follows.£446,500 x 7/47 x 1/10 x (100% – 72%) x 3 = £5,586.Professional Level –Options Module, Paper P6 (UK)Advanced Taxation (United Kingdom)June 2008 Marking SchemeAvailable Maximum1(a)(i)Identification of group members1Identification of strategy1Calculation of corporation tax rate limits1Advice1Relevance of dividend received by Saturn Ltd1T ax saving1Submission date for group relief claim1Loss carryback1·5–––––8·57–––––(ii)Not in group relief group1Recognition of condition for consortium to exist/information required2Relief available if consortium exists1·5Relief available if no consortium1Possible restriction on ability to carry forward loss2–––––7·56–––––(iii)Value added tax/information required2No balancing charge1Capital gain1Rollover relief:Assets to be acquired by T ethys Ltd1·5Amount of relief available1Relevant assets1Qualifying period1–––––8·57–––––(iv)Stamp duty2–––––22–––––Appropriate style and presentation1Effectiveness of communication1–––––22–––––(b)Information needed – 1 mark each3Action to takeThreats and safeguards2Contact existing tax adviser1–––––65––––––––Total29–––Available Maximum 2(a)The additional income:Interest – 0·5 for each year1Dividends – 0·5 for each year1Property income0·5Children’s interest – identification of issue1De minimis1 John’s income tax:2005/06:Car benefit1Fuel benefit0·5T rust income1Personal allowance0·5Remainder of basic rate band0·5Additional tax liability2T ax credits1Comparison with the tax paid by Maureen0·52006/07:Car0·5Fuel benefit0·5T rust income0·5Personal allowance0·5Remainder of basic rate band0·5Additional tax liability2T ax credits1Comparison with the tax paid by Maureen0·5 Maureen’s income tax:T rading income:Capital allowances12005/06 assessment12006/07 assessment1·5T ax on investment income:2005/062·52006/072·5 Additional capital gains tax due:Annual exemption0·5Additional tax1·5 T otal additional tax due0·5–––––28·526–––––Clarity of presentation and use of headings1Logical structure1–––––22–––––(b)Conditions for voluntary deregistration1Effective date0·5Deemed supply1De minimis limit1Stop charging VAT0·5Cannot recover input tax0·5Deductible for income tax0·5Need to monitor turnover1Suggestion of flat rate scheme1Operation of the scheme2Possible financial advantage0·5–––––9·58–––––Effectiveness of communication1–––––11––––––––T otal37–––。
2008年6月ACCA F7真题
P a p e r F 7 ( U K )ALL FIVE questions are compulsory and MUST be attempted1On 1 August 2007 Patronic purchased 18 million of a total of 24 million equity shares in Sardonic. The acquisition was through a share exchange of two shares in Patronic for every three shares in Sardonic. Both companies have shares with a par value of £1 each. The market price of Patronic’s shares at 1 August 2007 was £5·75 per share.Patronic will also pay in cash on 31 July 2009 (two years after acquisition) £2·42 per acquired share of Sardonic.Patronic’s cost of capital is 10% per annum. The reserves of Sardonic on 1 April 2007 were £69 million.Patronic has held an investment of 30% of the equity shares in Acerbic for many years.The summarised profit and loss accounts for the three companies for the year ended 31 March 2008 are:Patronic Sardonic Acerbic£’000£’000£’000 T urnover150,00078,00080,000Cost of sales(94,000)(51,000)(60,000)––––––––––––––––––––––Gross profit56,00027,00020,000Distribution costs(7,400)(3,000)(3,500)Administrative expenses(12,500)(6,000)(6,500)––––––––––––––––––––––Operating profit36,10018,00010,000Finance costs (note (ii))(2,000)(900)nil––––––––––––––––––––––Profit before tax34,10017,10010,000T ax(10,400)(3,600)(4,000)––––––––––––––––––––––Profit for the year23,70013,5006,000––––––––––––––––––––––The following information is relevant:(i)The fair values of the net assets of Sardonic at the date of acquisition were equal to their carrying amounts withthe exception of property and plant. Property and plant had fair values of £4·1 million and £2·4 million respectively in excess of their carrying amounts. The increase in the fair value of the property would create additional depreciation of £200,000 in the consolidated financial statements in the post acquisition period to31 March 2008 and the plant had a remaining life of four years (straight-line depreciation) at the date ofacquisition of Sardonic. All depreciation is treated as part of cost of sales.The fair values have not been reflected in Sardonic’s financial statements.No fair value adjustments were required on the acquisition of Acerbic.(ii)The finance costs of Patronic do not include the finance cost on the deferred consideration.(iii)Prior to its acquisition, Sardonic had been a good customer of Patronic. In the year to 31 March 2008, Patronic sold goods at a selling price of £1·25 million per month to Sardonic both before and after its acquisition. Patronic made a profit of 20% on the cost of these sales. At 31 March 2008 Sardonic still held stock of £3 million (at cost to Sardonic) of goods purchased in the post acquisition period from Patronic.(iv)The goodwill of Sardonic should be amortised over a nine-year life with time apportionment in the year of acquisition. The goodwill in Acerbic was deemed to have an indefinite life and was not impaired at 31 March 2008.(v)All items in the above profit and loss accounts are deemed to accrue evenly over the year.(vi)Ignore deferred tax.2Required:(a)Calculate the goodwill arising on the acquisition of Sardonic at 1 August 2007. (6 marks)(b) Prepare the consolidated profit and loss account for the Patronic Group for the year ended 31 March 2008.Note: assume that the investment in Acerbic has been accounted for using the equity method since its acquisition.(15 marks) (c)At 31 March 2008 the other equity shares (70%) in Acerbic were owned by many separate investors. Shortlyafter this date Spekulate (a company unrelated to Patronic) accumulated a 60% interest in Acerbic by buying shares from the other shareholders. In May 2008 a meeting of the board of directors of Acerbic was held at which Patronic lost its seat on Acerbic’s board.Required:Explain, with reasons, the accounting treatment Patronic should adopt for its investment in Acerbic when it prepares its financial statements for the year ending 31 March 2009.(4 marks)(25 marks)3[P.T.O.2Below is the summarised draft balance sheet of Dexon, a publicly listed company, as at 31 March 2008.£’000£’000£’000 Fixed assetsProperty at valuation (land £20,000; buildings £165,000 (note (ii))185,000 Plant (note (ii))180,500 Investments at fair value through profit and loss at 1 April 2007 (note (iii))12,500––––––––378,000 Current assetsStock 84,000Debtors (note (iv))52,200Bank3,800––––––––140,000 Creditors: amounts falling due within one year (81,800)––––––––Net current assets58,200 Provisions for liabilitiesDeferred tax –at 1 April 2007 (note (v))(19,200)––––––––Net assets417,000––––––––Share capital and reservesOrdinary shares of £1 each 250,000 Share premium 40,000Revaluation reserve18,000Profit and loss account–at 1 April 200712,300–for the year ended 31 March 200896,700109,000167,000–––––––––––––––––––––––417,000––––––––The following information is relevant:(i)Dexon’s profit and loss account for the year includes £8 million in turnover from credit sales made on a ‘sale orreturn’ basis. At 31 March 2008, customers who had not paid for the goods, had the right to return £2·6 million of them. Dexon applied a mark up on cost of 30% on all these sales. In the past, Dexon’s customers have sometimes returned goods under this type of agreement.(ii)The fixed assets have not been depreciated for the year ended 31 March 2008.Dexon has a policy of revaluing its land and buildings at the end of each accounting year. The values in the above balance sheet are as at 1 April 2007 when the buildings had a remaining life of fifteen years. A qualified surveyor has valued the land and buildings at 31 March 2008 at £180 million.Plant is depreciated at 20% on the reducing balance basis.(iii)The investments at fair value through profit and loss are held in a fund whose value changes directly in proportion to a specified market index. At 1 April 2007 the relevant index was 1,200 and at 31 March 2008 it was 1,296.(iv)In late March 2008 the directors of Dexon discovered a material fraud perpetrated by the company’s credit controller that had been continuing for some time. Investigations revealed that a total of £4 million of the debtors as shown in the balance sheet at 31 March 2008 had in fact been paid and the money had been stolen by the credit controller. An analysis revealed that £1·5 million had been stolen in the year to 31 March 2007 with the rest being stolen in the current year. Dexon is not insured for this loss and it cannot be recovered from the credit controller, nor is it deductible for tax purposes.(v)During the year the company’s timing differences increased by £10 million (capital allowances in excess of carrying values) of which £6 million related to the revaluation of the property. Dexon has a firm commitment to sell this property in the near future and has therefore been advised that a tax liability will arise on its sale. The applicable corporation tax rate is 20%.4(vi)The above figures do not include the estimated provision for corporation tax on the profits for the year ended31 March 2008. After allowing for any adjustments required in items (i) to (iv), the directors have estimated theprovision at £11·4 million (this is in addition to the deferred tax effects of item (v)).(vii)On 1 September 2007 there was a fully subscribed rights issue of one new share for every four held at a price of £1·20 each. The proceeds of the issue have been received and the issue of the shares has been correctly accounted for in the above balance sheet.(viii)In May 2007 a dividend of 4 pence per share was paid. In November 2007 (after the rights issue in item (vii) above) a further dividend of 3 pence per share was paid. Both dividends have been correctly accounted for in the above balance sheet.Required:Taking into account any adjustments required by items (i) to (viii) above(a)Prepare a statement showing the recalculation of Dexon’s profit for the year ended 31 March 2008.(8 marks)(b)Prepare a statement of the movements in the share capital and reserves of Dexon for the year ended31 March 2008.(8 marks)(c)Redraft the balance sheet of Dexon as at 31 March 2008.(9 marks) Note: notes to the financial statements are NOT required.(25 marks)5[P.T.O.3Pinto is a publicly listed company. The following financial statements of Pinto are available: Profit and loss account for the year ended 31 March 2008£’000 T urnover5,740 Cost of sales(4,840)––––––Gross profit900 Distribution costs (120) Administrative expenses (note (ii))(350)––––––Operating profit430 Income from and gains on investment property60 Finance costs (50)––––––Profit before tax440 T ax(160)––––––Profit for the year280––––––Balance sheets as at31 March 200831 March 2007£’000£’000£’000£’000 Fixed assetsT angible assets (note (i))2,8801,860 Investment property420400––––––––––––3,3002,260 Current assetsStock1,210810Debtors480540T ax asset nil50Bank10nil––––––––––––1,7001,400––––––––––––Creditors: amounts falling due within one yearBank overdraft nil120Creditors1,4101,050Warranty provision (note (iv))200100T axation150nil––––––––––––(1,760)(1,270)––––––––––––Net current assets (liabilities)(60)130 Creditors: amounts falling due after more than one year6% loan notes (note (ii))nil(400) Provisions for liabilitiesDeferred tax(50)(30)––––––––––––3,1901,960––––––––––––Capital and reservesEquity shares of 20 pence each (note (iii))1,000600 Share premium600nilRevaluation reserve (note (i))15050Profit and loss account1,4402,1901,3101,360––––––––––––––––––––––––3,1901,960––––––––––––6The following supporting information is available:(i)The increase in the revaluation reserve is attributable to a revaluation of Pinto’s property during the year.An item of plant with a carrying amount of £240,000 was sold at a loss of £90,000 during the year. Depreciation of £280,000 was charged (to cost of sales) for tangible fixed assets the year ended 31 March 2008.There were no purchases or sales of investment property during the year.(ii)The 6% loan notes were redeemed early incurring a penalty payment of £20,000 which has been charged as an administrative expense in the profit and loss account.(iii)There was an issue of shares for cash on 1 October 2007. There were no bonus issues of shares during the year. (iv)Pinto gives a 12 month warranty on some of the products it sells. The amounts shown as warranty provision are an accurate assessment, based on past experience, of the amount of claims likely to be made in respect of warranties outstanding at each year end. Warranty costs are included in cost of sales.(v) A dividend of 3 pence per share was paid on 1 January 2008.Required:(a)Prepare a cash flow statement for Pinto for the year to 31 March 2008 in accordance with FRS 1 Cash FlowStatements.(15 marks) (b)Comment on the cash flow management of Pinto as revealed by the cash flow statement and the informationprovided by the above financial statements.Note: ratio analysis is not required, and will not be awarded any marks.(10 marks)(25 marks)7[P.T.O.4(a)The ASB’s Statement of Principles for Financial Reporting requires financial statements to be prepared on the basis that they comply with certain accounting concepts, underlying assumptions and (qualitative) characteristics. Five of these are:Matching/accrualsSubstance over formPrudenceComparabilityMaterialityRequired:Briefly explain the meaning of each of the above principles/concepts.(5 marks)(b)For most entities, applying the appropriate concepts/assumptions in accounting for stock is an important elementin preparing their financial statements.Required:Illustrate with examples how each of the principles/concepts in (a) may be applied to accounting for stock.(10 marks)(15 marks) 5Pingway issued a £10 million 3% convertible loan note at par on 1 April 2007 with interest payable annually in arrears. Three years later, on 31 March 2010, the loan note is convertible into equity shares on the basis of £100 of loan note for 25 equity shares or it may be redeemed in cash at par at the option of the loan note holder. One of the company’s financial assistants observed that the use of a convertible loan note was preferable to a non-convertible loan note as the latter would have required an interest rate of 8% in order to make it attractive to investors. The assistant has also commented that the use of a convertible loan note will improve the profit as a result of lower interest costs and, as it is likely that the loan note holders will choose the equity option, the loan note can be classified as equity which will improve the company’s high gearing position.The present value of £1 receivable at the end of the year, based on discount rates of 3% and 8% can be taken as:3%8%££End of year 10·970·9320·940·8630·920·79Required:Comment on the financial assistant’s observations and show how the convertible loan note should be accounted for in Pingway’s profit and loss account for the year ended 31 March 2008 and balance sheet as at that date.(10 marks)End of Question Paper8。
二八年年报107
投資活動 利息收入 利息支出 股息收入 投資物業重建╱復修支出
物業及設備支出 持作買賣用途投資支出 投資管理費及銀行費用支出
投資活動現金流入淨額
CASH USED IN FINANCING ACTIVITY Repayment of loans from government NET INCREASE IN CASH AND
and properties under development for sale
發展中物業減值
8
Impairment of investment properties and provision for rehabilitation work
投資物業減值損失及復修 準備
NET SURPLUS
盈餘淨額
and receivables Other expenses Auditor’s remuneration
支出 物業發展及有關成本 市場及銷售費用 屋宇租賃及管理支出 職工成本 投資物業折舊 攤銷預付土地租賃開支 物業及設備折舊 投資費用 給予住宅業主的財務資助 活化項目支出 應收貸款及應收賬
（減值撥回）╱ 減值 其他支出 核數師酬金
(165.6) (37.6) 115.5
(6.1) 379.3 6,485.5 6,864.8
6,864.8
110
Annual Report 2008
Notes to the financial statements 財務報表附註
(in HK$Million)
NON-CURRENT ASSETS Property and equipment Prepaid lease payments Investment properties Loans receivable
The financial crisis of 2008
The Financial Crisis in 2008The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed, and governments in even the wealthiest nations have had to come up with rescue packages. The crisis proved that in this increasingly inter-connected world, the global financial meltdown will affect the livelihoods of almost everyone.Before seeing out the origins, let’s first have a review on the background behind the crisis. The bursting of the U.S. housing bubble, which peaked in 2006, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier access to loans, overvaluation of bundled sub-prime mortgages based on the theory that housing prices would continue to escalate, questionable trading practices on behalf of both buyers and sellers, compensation structures that prioritize short-term deal flow over long-term value creation, and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making. Questions regarding bank solvency,declines in credit availability and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during 2008 and early 2009. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts.Many causes for the financial crisis have been suggested. The U.S. Senate's Levin–Coburn Report concluded that the crisis was the result of "high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street." The Financial Crisis Inquiry Commission concluded that the financial crisis was avoidable and was caused by "widespread failures in financial regulation and supervision," "dramatic failures of corporate governance and risk management at many systemically important financial institutions," "a combination of excessive borrowing, risky investments, and lack of transparency" by financial institutions, ill preparation and inconsistent action by government that "added to the uncertainty and panic," a "systemic breakdown in accountability and ethics," "collapsing mortgage-lending standards and the mortgage securitization pipeline," deregulation of over-the-counter derivatives, especially credit default swaps, and "the failures of credit rating agencies" to correctly price risk.In an article written by Bill Thomas, Keith Hennessey and Douglas Holtz-Eaki Keith Hennessey in 2011, it was believed the crisis was the product of 10 factors. Only when taken together can they offer a sufficient explanation of what happened.Starting in the late 1990s, there was a broad credit bubble in the U.S. and Europe and a sustained housing bubble in the U.S. (factors 1 and 2). Excess liquidity, combined with rising house prices and an ineffectively regulated primary mortgage market, led to an increase in nontraditional mortgages (factor 3). However, the credit bubble, housing bubble, and the explosion of nontraditional mortgage products are not by themselves responsible for the crisis. Which raises the essential question: Why were these firms so exposed? Failures in credit-rating and securitization transformed bad mortgages into toxic financial assets (factor 4). The years before the crisis saw a flood of irresponsible mortgage lending in America. Securitizers lowered the credit quality of the mortgages they securitized, and buyers failed to look behind the ratings and do their own due diligence. Managers of many large and midsize financial institutions amassed enormous concentrations of highly correlated housing risk (factor 5), and they amplified this risk by holding too little capital relative to the risks and funded these exposures with short-term debt (factor 6).These risks within highly leveraged, short-funded financial firms with concentrated exposure to a collapsing asset class led to a cascade of firm failures. The losses spread in two ways. Some firms had large counterparty credit risk exposures, and the sudden and disorderly failure of one firm risked triggering losses elsewhere. We call this the risk of contagion (factor 7). In other cases, the problem was a common shock (factor 8). A number of firms had made similar bad bets on housing, and thus unconnected firms failed for the same reason and at roughly the same time. A rapid succession of ten firm failures, mergers and restructurings in September 2008 caused a financial shock and panic (factor 9). Confidence and trust in the financial system evaporated, as the health of almost every large and midsize financial institution in the U.S. and Europe was questioned. The financial shock and panic caused a severe contraction in the real economy (factor 10).Failures in finance were at the heart of the crash. But bankers were not the only people to blame. Central bankers and other regulators bear responsibility too, for mishandling the crisis, for failing to keep economic imbalances in check and for failing to exercise proper oversight of financial institutions. The regulators’ most dramatic error was to let Lehman Brothers go bankrupt. This multiplied the panic in markets. Trust, the ultimate glue of all financial systems, began to dissolve. But theregulators made mistakes long before the Lehman bankruptcy, most notably by tolerating global current-account imbalances and the housing bubbles that they helped to inflate.In an What We’ve Learned from the Financial Crisis published on Harvard Business Review in November 2013, the author Justin Fox pointed out that seven years after the crash of 1929, John Maynard Keynes published the most influential work to come out of that era of turmoil—The General Theory of Employment, Interest and Money. Five years after the crash of 2008 is still early to be trying to determine its intellectual consequences. Still, one can see signs of its impact on economic thinking. ―I’ve been following academic economics and finance as a journalist since the mid-1990s, and I’ve resea rched academic debates going back much further than that. To me, three shifts in thinking stand out: (1) Macroeconomists are realizing that it was a mistake to pay so little attention to finance. (2) Financial economists are beginning to wrestle with some of the broader consequences of what they’ve learned over the years about market misbehavior. (3) Economists’ extremely influential grip on a key component of the economic world—the corporation—may be loosening,‖ said Justin.高二（五）班高子闻。
香港公司注册处法团成立表格NC1
法團成立表格 (股份有限公司) Incorporation Form (Company Limited by Shares)公 司 註 冊 處Companies Registry(《公司條例》第14A 條) (Companies Ordinance s. 14A)表格 FormNC1重要事項 Important Notes ● 填表前請參閱《填表須知》。
請用黑色墨水列印。
●Please read the accompanying notes before completing this form. Please print in black ink.(註Note 7) 1擬採用的公司名稱Intended Company Name(註Note 8)2 公司類別Type of Company請在適用的空格內加上✓ 號Please tick the relevant box私人Private非私人Non-private(註Note 9)3 公司在香港的註冊辦事處擬採用的地址(註Note 10) 4(註Note 3)表格 NC1Form(註Note 11)5 股本Share CapitalPlease specify the currency (e.g. HKD, USD)(註Note 12)6創辦成員Founder Members(如有超過兩名創辦成員，請用續頁A 填報 Use Continuation Sheet A if more than 2 founder members)1中文姓名／名稱 Name in Chinese英文姓名／名稱 Name in English地址Address承購的股份Shares to be taken2中文姓名／名稱 Name in Chinese英文姓名／名稱 Name in English地址 Address承購的股份Shares to be taken.of shares第二頁Page 2指明編號1/2011(修訂) (2011年2月)Specification No. 1/2011(Revision) (Feb. 2011)(註Note 13)7首任秘書First Secretary(如有超過一名個人或法人團體秘書，請用續頁B 填報 Use Continuation Sheet B if more than 1 individual or corporate secretary)A. 個人秘書Individual Secretary中文姓名Name in Chinese英文姓名Name in English前用姓名╱別名Previous Names ╱Alias(註Note 14)香港住址 Hong Kong Residential Address(註Note 15)電郵地址E-mail Address(註Note 16)身份證明Identificationa 香港身份證號碼 Hong Kong Identity Card Numberb 護照PassportB. 法人團體秘書Corporate Secretary(註Note 17)中文名稱Name in Chinese(註Note 17)英文名稱Name in English(註Note 18)香港地址 Hong Kong Address(註Note 15)電郵地址E-mail Address公司編號Company Number(只適用於在香港註冊的法人團體 )(Only applicable to body corporate registered in Hong Kong)第三頁Page 3指明編號1/2008 (2008年7月) Specification No. 1/2008 (July 2008)(註Note 13) 8 首任董事First DirectorsA. 個人董事Individual Director(如有超過一名個人董事，請用續頁C 填報 Use Continuation Sheet C if more than 1 individual director)中文姓名Name in Chinese英文姓名Name in English前用姓名Previous Names別名 Alias(註Note19)住址Residential Address(註Note 20)電郵地址E-mail Address(註Note 21)身份證明Identification a 香港身份證號碼Hong Kong Identity Card Numberb 護照 Passport(註Note 23)(註Note 23)出任董事職位同意書Consent to Act as Director第四頁Page 4指明編號1/2008 (2008年7月) Specification No. 1/2008 (July 2008)8 首任董事First Directors (續上頁cont’d)B. 法人團體董事Corporate Director(如有超過一名法人團體董事，請用續頁D填報Use Continuation Sheet D if more than 1 corporate director)Name in Chinese英文名稱Name in EnglishAddress(註Note 20)電郵地址E-mail Address公司編號Company Number(只適用於在香港註冊的法人團體)(Only applicable to body corporate registered in Hong Kong)(註Note 23)(註Note 23)出任董事職位同意書Consent to Act as Director第五頁Page 5 指明編號1/2008(2008年7月)Specification No. 1/2008 (July 2008)(註Note 24)9 遵從公司註冊規定陳述書Statement of Compliance on Incorporation請在適用的空格內加上✓號Please tick the relevant box本表格包括下列續頁。
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现金流量表(网校张志凤老师讲解)一、现金流量表的编制基础现金流量表是以现金为基础编制的反映企业财务状况变动的报表，它反映公司或企业一定会计期间内有关现金和现金等价物的流入和流出的信息，表明企业获得现金和现金等价物的能力。
现金流量表是以现金为基础编制的，这里的现金是指企业库存现金、可以随时用于支付的存款，以及现金等价物。
二、现金流量的分类通常按照企业经济业务的性质将企业在一定期间产生的现金流量划分为三类：经营活动产生的现金流量、投资活动产生的现金流量和筹资活动产生的现金流量三类。
考生应注意掌握每类现金流量的具体项目。
三、现金流量表的基本格式和编制方法（一）现金流量表的基本格式P230 表10-10（二）现金流量表的编制方法1.经营活动产生的现金流量的编制方法（1）间接法和直接法（2）经营活动现金流量各项目的内容资料：资产负债表、利润表和其他有关资料。
① "销售商品、提供劳务收到的现金"项目销售商品、提供劳务收到的现金＝销售商品、提供劳务产生的"收入和增值税销项税额" ＋应收账款项目本期减少额－应收账款项目本期增加额＋应收票据项目本期减少额－应收票据项目本期增加额＋预收账款项目本期增加额－预收账款项目本期减少额±特殊调整业务例：某企业2002年度有关资料如下：（1）应收账款项目：年初数100万元，年末数120万元；（2）应收票据项目：年初数40万元，年末数20万元；（3）预收账款项目：年初数80万元，年末数90万元；（4）主营业务收入6000万元；（5）应交税金－应交增值税（销项税额）1037万元；（6）其他有关资料如下：本期计提坏账准备5万元（该企业采用备抵法核算坏账损失），本期发生坏账回收2万元，应收票据贴现使"财务费用" 账户产生借方发生额3万元，工程项目领用的本企业产品100万元产生增值税销项税额17万元，收到客户用11.7万元商品（货款10万元，增值税1.7万元）抵偿前欠账款12万元。
根据上述资料，计算销售商品、提供劳务收到的现金。
销售商品、提供劳务收到的现金＝（销售商品、提供劳务产生的"收入和增值税销项税额"）－应收账款本期增加额＋应收票据本期减少额＋预收账款本期增加额＋特殊调整业务＝（6000＋1020）－20＋20＋10－5－3－12 ＝7010万元②收到的税费返还③收到的其他与经营活动有关的现金④ "购买商品、接受劳务支付的现金"项目购买商品、接受劳务支付的现金＝购买商品、接受劳务产生的"销售成本和增值税进项税额" ＋应付账款项目本期减少额－应付账款项目本期增加额＋应付票据项目本期减少额－应付票据项目本期增加额＋预付账款项目本期增加额－预付账款项目本期减少额＋存货项目本期增加额－存货项目本期减少额±特殊调整业务例：某企业2002年度有关资料如下：（1）应付账款项目：年初数100万元，年末数120万元；（2）应付票据项目：年初数40万元，年末数20万元；（3）预付账款项目：年初数80万元，年末数90万元；（4）主营业务成本4000万元；（6）存货项目的年初数为100万元，年末数为80万元；（7）应交税金－应交增值税（进项税额）600万元；（8）其他有关资料如下：用固定资产偿还应付账款10万元，生产成本中直接工资项目含有本期发生的生产工人工资费用100万元，本期制造费用发生额为60万元（其中消耗的物料为5万元），工程项目领用的本企业产品10万元。
根据上述资料，计算购买商品、接受劳务支付的现金。
根据上述资料，购买商品产生的销售成本4000万元和购买商品产生的增值税进项税额600万元作为计算购买商品、接受劳务支付现金的起点；应付账款本期增加20万元，应作为减项处理；应付票据本期减少20万元，应作为加项处理；预付账款本期增加10万元，应作为加项处理；存货项目本期减少20万元，应作为减项处理；用固定资产偿还应付账款10万元，生产成本中直接工资项目含有本期发生的生产工人工资费用100万元，本期制造费用发生额为55万元（扣除消耗的物料为5万元），上述三项业务的合计数165万元应作为减项处理；工程项目领用的本企业产品10万元，应作为加项处理。
购买商品、接受劳务支付的现金＝（购买商品、接受劳务产生的"销售成本和增值税进项税额"）－应付账款本期增加额＋应付票据本期减少额＋预付账款本期增加额－存货项目本期减少额＋特殊调整业务＝（4000＋600）－20＋20＋10－20－165＋10＝4435万元⑤支付给职工以及为职工支付的现金不包括支付给离退休人员的工资和在建工程人员的工资。
⑥支付的各项税费⑦支付的其他与经营活动有关的现金[例题4]：甲公司2001年度发生的管理费用为2200万元，其中:以现金支付退休职工统筹退休金350万元和管理人员工资950万元，存货盘亏损失25万元，计提固定资产折旧420万元，无形资产摊销200万元，计提坏账准备150万元，其余均以现金支付。
假定不考虑其他因素，甲公司2001年度现金流量表中"支付的其他与经营活动有关的现金"项目的金额为( )万元。
(2002年考题)A.105B.455C.475D.675答案：B解析："支付的其他与经营活动有关的现金"项目的金额＝2200－950－25－420－200－150＝455万元。
2.投资活动产生的现金流量的编制方法（1）收回投资所收到的现金不包括收回长期债权投资收回的利息。
（2）取得投资收益所收到的现金（3）处置固定资产、无形资产和其他长期资产而收到的现金净额（4）收到的其他与投资活动有关的现金如：收回购买股票和债券时支付的已宣告但尚未领取的现金股利或已到付息期但尚未领取的债券利息。
（5）购建固定资产、无形资产和其他长期资产所支付的现金不包括为购建固定资产而发生的借款利息资本化的部分，以及融资租入固定资产支付的租赁费。
企业以分期付款方式购建的固定资产，其首次付款支付的现金作为投资活动的现金流出，以后各期支付的现金作为筹资活动的现金流出。
（6）投资所支付的现金（7）支付的其他与投资活动有关的现金如：企业购买股票和债券时，实际支付的价款中包含的已宣告但尚未领取的现金股利或已到付息期但尚未领取的债券利息。
3.筹资活动产生的现金流量的编制方法（1）吸收投资所收到的现金（2）借款所收到的现金（3）收到的其他与筹资活动有关的现金如：现金捐赠。
（4）偿还债务所支付的现金（5）分配股利、利润和偿付利息所支付的现金（6）支付的其他与筹资活动有关的现金4.汇率变动对现金的影响额[例题5]：下列经济业务所产生的现金流量中，属于"经营活动产生的现金流量"的是（）。
A.变卖固定资产所产生的现金流量B.取得债券利息收入所产生的现金流量C.支付经营租赁费用所产生的现金流量D.支付融资租赁费用所产生的现金流量答案：C[例题6]：下列交易或事项产生的现金流量中，属于投资活动产生的现金流量的有( )。
A.为购建固定资产支付的耕地占用税B.为购建固定资产支付的已资本化的利息费用C.因火灾造成固定资产损失而收到的保险赔款D.最后一次支付分期付款购入固定资产的价款答案：AC解析：为购建固定资产支付的已资本化的利息费用和最后一次支付分期付款购入固定资产的价款属于筹资活动现金流量。
[例题7]：下列各项中，应作为现金流量表中经营活动产生的现金流量的有（）。
（2003年考题）A.接受其他企业捐赠的现金B.取得短期股票投资而支付的现金C.取得长期股权投资而支付的手续费D.为管理人员缴纳商业保险而支付的现金E.收到供货方未履行合同而交付的违约金答案：DE解析：接受其他企业捐赠的现金属于筹资活动产生的现金流量；取得短期股票投资而支付的现金和取得长期股权投资而支付的手续费属于投资活动产生的现金流量。
5.补充资料项目的内容及填列补充资料中"将净利润调节为经营活动的现金流量"，实际上是以间接法编制的经营活动的现金流量。
间接法是以净利润为出发点，通过对若干项目的调整，最终计算确定经营活动产生的现金流量。
其基本原理是：经营活动产生的现金流量净额＝净利润＋不影响经营活动现金流量但减少净利润的项目－不影响经营活动现金流量但增加净利润的项目＋与净利润无关但增加经营活动现金流量的项目－与净利润无关但减少经营活动现金流量的项目。
对不影响经营活动现金流量但影响净利润的业务，一般应通过调整"损益类"账户的发生额确定，此类业务涉及的是"投资活动"和"筹资活动"两类业务。
如无形资产摊销业务，应调整"管理费用－－无形资产摊销"账户；对与净利润无关但影响经营活动现金流量的业务，应通过调整"经营性流动性类"账户本身的发生额确定。
如收回客户前欠账款业务，应分析调整"应收账款"账户的发生额确定。
具体项目内容说明如下：（1）计提的资产减值准备项目资产减值准备项目包括坏账准备、存货跌价准备、短期投资跌价准备、长期投资减值准备、固定资产减值准备和无形资产减值准备等。
本期资产计提减值准备时，记入当期的利润表中的"损益类"项目。
但实际上并未影响经营活动现金流量，因此，应在净利润的基础上进行调整，当计提资产减值准备时，应将其加回到净利润中，若恢复以前年度计提的减值准备，应从净利润中将其扣除。
（2）固定资产折旧企业计提固定资产折旧时，有的计入管理费用等期间费用，有的计入制造费用。
计入期间费用部分已列入了利润表，计入制造费用部分则可能通过销售成本列入利润表，也可能形成企业的存货。
企业计提的固定资产折旧，并不影响经营活动现金流量，应在净利润的基础上将其全部加回。
当计提的固定资产折旧费包含在存货中时，虽然未影响净利润，但是增加了存货，这里也将其加回，然后在"存货的减少（减：增加）项目中在将其相同净额扣除，形成自动平衡。
（3）无形资产摊销和长期待摊费用摊销无形资产摊销时，计入了管理费用，使本期净利润减少，应在净利润的基础上将其全部加回。
长期待摊费用摊销时，计入了管理费用或制造费用等。
本项目的确定原理与固定资产折旧项目相同，应在净利润的基础上将其全部加回。
（4）待摊费用的减少（减：增加）本项目反映由于经营活动影响的待摊费用的增减变化，待摊费用减少一般会增加费用，减少净利润，应在净利润的基础上加回；待摊费用增加一般会减少现金或存货等，应从净利润中扣除。
但由于投资活动和筹资活动业务影响的待摊费用的增加或减少业务，则不应考虑。