(c) (i) Using ONLY the above information, assess the competitive position of Diverse Holdings Plc.
(7 marks)
第1题:
Susan is aware of benchmarking as a useful input into performance measurement and strategic change.
(b) Assess the contribution benchmarking could make to improving the position of the Marlow Fashion Group
and any limitations to its usefulness. (8 marks)
(b) Benchmarking at Marlow Fashion will not be an easy exercise. Marlow Fashion has developed a distinctive way of reaching
its markets that means direct comparisons will be hard to make. Certainly, it can carry out historical benchmarking in
comparing how its own processes and activities have improved, or otherwise, over a relevant period of time. Unfortunately,
this is likely to simply confirm worsening performance. It can compare its own key operations against the ‘best in class’;
regardless of which industry the excellent performer comes from. It could and should have been carrying out competitive
benchmarking on the retail side of the business where information should be more easily available. There may be an
opportunity to benchmark itself against firms that have gone through a similar crisis and achieved a successful turnaround.
In terms of the advantages and disadvantages, the willingness of managers responsible for a key area of performance to
compare themselves against relevant external performance measures should make them take responsibility for any changes
necessary. In Marlow Fashion, the acceptance that things have to be done differently will be the first stage in the turnaround.
Getting managers face-to-face with the problems, accepting responsibility for change and recognising that the necessary
changes are ‘doable’ is an important stage in creating a willingness to change. The disadvantages are that every organisation
and situation is different and there is no one best way. Marlow Fashion thought it had discovered the best way and this created
an unwillingness to change. There is also the danger that you are solving today’s problems with yesterday’s solutions. A good
competitor will be trying to maintain its competitive advantage through constantly improving its processes. It also has a vested
interest in trying to prevent its improvements from being revealed to its competitors. Also, many of the ‘softer’ processes –
typically involving people – are difficult if not impossible to replicate in another organisation. These advantages are to do with
culture and leadership and not easily transferable to another organisation and the context in which it is operating.
第2题:
(b) What are the advantages and disadvantages of using a balanced scorecard to better assess the overall
performance of Lawson Engineering? (8 marks)
第3题:
A project manager can exchange information with the project team using which media?
A tactile
B audio
C olfactory
D visual
E All of the above.
第4题:
(b) Explain how the use of SWOT analysis may be of assistance to the management of Diverse Holdings Plc.
(3 marks)
第5题:
(b) (i) Discusses the principles involved in accounting for claims made under the above warranty provision.
(6 marks)
(ii) Shows the accounting treatment for the above warranty provision under IAS37 ‘Provisions, Contingent
Liabilities and Contingent Assets’ for the year ended 31 October 2007. (3 marks)
Appropriateness of the format and presentation of the report and communication of advice. (2 marks)
(b) Provisions – IAS37
An entity must recognise a provision under IAS37 if, and only if:
(a) a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event)
(b) it is probable (‘more likely than not’), that an outflow of resources embodying economic benefits will be required to settle
the obligation
(c) the amount can be estimated reliably
An obligating event is an event that creates a legal or constructive obligation and, therefore, results in an enterprise having
no realistic alternative but to settle the obligation. A constructive obligation arises if past practice creates a valid expectation
on the part of a third party. If it is more likely than not that no present obligation exists, the enterprise should disclose a
contingent liability, unless the possibility of an outflow of resources is remote.
The amount recognised as a provision should be the best estimate of the expenditure required to settle the present obligation
at the balance sheet date, that is, the amount that an enterprise would rationally pay to settle the obligation at the balance
sheet date or to transfer it to a third party. This means provisions for large populations of events such as warranties, are
measured at a probability weighted expected value. In reaching its best estimate, the entity should take into account the risks
and uncertainties that surround the underlying events.
Expected cash outflows should be discounted to their present values, where the effect of the time value of money is material
using a risk adjusted rate (it should not reflect risks for which future cash flows have been adjusted). If some or all of the
expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement should be
recognised as a separate asset when, and only when, it is virtually certain that reimbursement will be received if the entity
settles the obligation. The amount recognised should not exceed the amount of the provision. In measuring a provision future
events should be considered. The provision for the warranty claim will be determined by using the expected value method.
The past event which causes the obligation is the initial sale of the product with the warranty given at that time. It would be
appropriate for the company to make a provision for the Year 1 warranty of $280,000 and Year 2 warranty of $350,000,
which represents the best estimate of the obligation (see Appendix 2). Only if the insurance company have validated the
counter claim will Macaljoy be able to recognise the asset and income. Recovery has to be virtually certain. If it is virtually
certain, then Macaljoy may be able to recognise the asset. Generally contingent assets are never recognised, but disclosed
where an inflow of economic benefits is probable.
The company could discount the provision if it was considered that the time value of money was material. The majority of
provisions will reverse in the short term (within two years) and, therefore, the effects of discounting are likely to be immaterial.
In this case, using the risk adjusted rate (IAS37), the provision would be reduced to $269,000 in Year 1 and $323,000 in
Year 2. The company will have to determine whether this is material.
Appendix 1
The accounting for the defined benefit plan is as follows:
第6题:
(b) Using relevant evaluation criteria, assess how achievable and compatible these three strategic goals are over
the next five years. (20 marks)
第7题:
(b) Using the information provided in the case scenario, strategically evaluate the performance of the company
up to 2004, indicating any areas of particular concern. (20 marks)
第8题:
Why does the author think it necessary to bring order to the Internet_________?
A. Because its database is disorganized.
B. Because the information required is specific.
C. Because its information is diverse and widespread.
D. All of the above.
第9题:
(c) Using information from the case, assess THREE risks to the Giant Dam Project. (9 marks)
第10题:
(ii) Explain THREE strategies that might be adopted in order to improve the future prospects of Diverse
Holdings Plc. (6 marks)