The Host Chapter 24: Tolerated

It was true that I did not smell good. I'd lost count of how many days I'd spent here-was it more than a week now? more than two?-and all of them sweating into the same clothes I'd worn on my disastrous desert trek. So much salt had dried into my cotton shirt that it was creased into rigid accordion wrinkles. It used to be pale yellow; now it was a splotchy, diseased-looking print in the same dark purple color as the cave floor. My short hair was crunchy and gritty; I could feel it standing out in wild tangles around my head, with a stiff crest on top, like a cockatoo's. I hadn't seen my face recently, but I imagined it in two shades of purple: cave-dirt purple and healing-bruise purple. So I could understand Jeb's point-yes, I needed a bath. And a change of clothes as well, to make the bath worth the effort. Jeb offered me some of Jamie's clothes to wear while mine dried, but I didn't want to ruin Jamie's few things by stretching them. Thankfully, he didn't try to offer me anything of Jared's. I ended up with an old but clean flannel shirt of Jeb's that had the sleeves ripped off, and a pair of faded, holey cutoff sweatpants that had gone unclaimed for months. These were draped over my arm-and a bumpy mound of vile-smelling, loosely molded chunks that Jeb claimed was homemade cactus soap was in my hand-as I followed Jeb to the room with the two rivers. Again we were not alone, and again I was miserably disappointed that this was the case. Three men and one woman-the salt-and-pepper braid-were filling buckets with water from the smaller stream. A loud splashing and laughing echoed from the bathing room. â€Å"We'll just wait our turn,† Jeb told me. He leaned against the wall. I stood stiffly beside him, uncomfortably conscious of the four pairs of eyes on me, though I kept my own on the dark hot spring rushing by underneath the porous floor. After a short wait, three women exited the bathing room, their wet hair dripping down the backs of their shirts-the athletic caramel-skinned woman, a young blonde I didn't remember seeing before, and Melanie's cousin Sharon. Their laughter stopped abruptly as soon as they caught sight of us. â€Å"Afternoon, ladies,† Jeb said, touching his forehead as if it were the brim of a hat. â€Å"Jeb,† the caramel woman acknowledged dryly. Sharon and the other girl ignored us. â€Å"Okay, Wanda,† he said when they'd passed. â€Å"It's all yours.† I gave him a glum look, then made my way carefully into the black room. I tried to remember how the floor went-I was sure I had a few feet before the edge of the water. I took off my shoes first, so that I could feel for the water with my toes. It was just so dark. I remembered the inky appearance of the pool-ripe with suggestions of what might lurk beneath its opaque surface-and shuddered. But the longer I waited, the longer I would have to be here, so I put the clean clothes next to my shoes, kept the smelly soap, and shuffled forward carefully until I found the lip of the pool. The water was cool compared to the steamy air of the outer cavern. It felt nice. That didn't keep me from being terrified, but I could still appreciate the sensation. It had been a long time since anything had been cool. Still fully dressed in my dirty clothes, I waded in waist deep. I could feel the stream's current swirl around my ankles, hugging the rock. I was glad the water was not stagnant-it would be upsetting to sully it, filthy as I was, if that were the case. I crouched down into the ink until I was immersed to my shoulders. I ran the coarse soap over my clothes, thinking this would be the easiest way to make sure they were clean. Where the soap touched my skin, it burned mildly. I took off the soapy clothes and scrubbed them under the water. Then I rinsed them again and again until there was no way any of my sweat or tears could have survived, wrung them out, and laid them on the floor beside where I thought my shoes were. The soap burned more strongly against my bare skin, but the sting was bearable because it meant I could be clean again. When I was done lathering, my skin prickled everywhere and my scalp felt scalded. It seemed as if the places where the bruises had formed were more sensitive than the rest of me-they must still have been there. I was happy to put the acidic soap on the rock floor and rinse my body again and again, the way I had my clothes. It was with a strange mingling of relief and regret that I sloshed my way out of the pool. The water was very pleasant, as was the feeling of clean, if prickling, skin. But I'd had quite enough of the blindness and the things I could imagine into the darkness. I felt around until I found the dry clothes, then I pulled them quickly on and shoved my water-wrinkled feet into my shoes. I carried my wet clothes in one hand and the soap gingerly between two fingers of the other. Jeb laughed when I emerged; his eyes were on the soap in my cautious grasp. â€Å"Smarts a bit, don't it? We're trying to fix that.† He held out his hand, protected by the tail of his shirt, and I placed the soap in it. I didn't answer his question because we weren't alone; there was a line waiting silently behind him-five people, all of them from the field turning. Ian was first in line. â€Å"You look better,† he told me, but I couldn't tell from his tone if he was surprised or annoyed that I did. He raised one arm, extending his long, pale fingers toward my neck. I flinched away, and he dropped his hand quickly. â€Å"Sorry about that,† he muttered. Did he mean for scaring me now or for marking up my neck in the first place? I couldn't imagine that he was apologizing for trying to kill me. Surely he still wanted me dead. But I wasn't going to ask. I started walking, and Jeb fell into step behind me. â€Å"So, today wasn't that bad,† Jeb said as we walked through the dark corridor. â€Å"Not that bad,† I murmured. After all, I hadn't been murdered. That was always a plus. â€Å"Tomorrow will be even better,† he promised. â€Å"I always enjoy planting-seeing the miracle of the little dead-looking seeds having so much life in them. Makes me feel like a withered old guy might have some potential left in him. Even if it's only to be fertilizer.† Jeb laughed at his joke. When we got to the big garden cavern, Jeb took my elbow and steered me east rather than west. â€Å"Don't try to tell me you're not hungry after all that digging,† he said. â€Å"It's not my job to provide room service. You're just going to have to eat where everyone else eats.† I grimaced at the floor but let him lead me to the kitchen. It was a good thing the food was exactly the same thing as always, because if, miraculously, a filet mignon or a bag of Cheetos had materialized, I wouldn't have been able to taste a thing. It took all my concentration just to make myself swallow-I hated to make even that small sound in the dead silence that followed my appearance. The kitchen wasn't crowded, just ten people lounging against the counters, eating their tough rolls and drinking their watery soup. But I killed all conversation again. I wondered how long things could last like this. The answer was exactly four days. It also took me that long to understand what Jeb was up to, what the motivation was behind his switch from the courteous host to the curmudgeonly taskmaster. The day after turning the soil I spent seeding and irrigating the same field. It was a different group of people than the day before; I imagined there was some kind of rotation of the chores here. Maggie was in this group, and the caramel-skinned woman, but I didn't learn her name. Mostly everyone worked in silence. The silence felt unnatural-a protest against my presence. Ian worked with us, when it was clearly not his turn, and this bothered me. I had to eat in the kitchen again. Jamie was there, and he kept the room from total silence. I knew he was too sensitive not to notice the awkward hush, but he deliberately ignored it, seeming to pretend that he and Jeb and I were the only people in the room. He chattered about his day in Sharon's class, bragging a little about some trouble he'd gotten into for speaking out of turn, and complaining about the chores she'd given him as punishment. Jeb chastised him halfheartedly. They both did a very good job of acting normal. I had no acting ability. When Jamie asked me about my day, the best I could do was stare intently at my food and mumble one-word answers. This seemed to make him sad, but he didn't push me. At night it was a different story-he wouldn't let me stop talking until I begged to be allowed to sleep. Jamie had reclaimed his room, taking Jared's side of the bed and insisting that I take his. This was very much as Melanie remembered things, and she approved of the arrangement. Jeb did, too. â€Å"Saves me the trouble of finding someone to play guard. Keep the gun close and don't forget it's there,† he told Jamie. I protested again, but both the man and the boy refused to listen to me. So Jamie slept with the gun on the other side of his body from me, and I fretted and had nightmares about it. The third day of chores, I worked in the kitchen. Jeb taught me how to knead the coarse bread dough, how to lay it out in round lumps and let it rise, and, later on, how to feed the fire in the bottom of the big stone oven when it was dark enough to let the smoke out. In the middle of the afternoon, Jeb left. â€Å"I'm gonna get some more flour,† he muttered, playing with the strap that held the gun to his waist. The three silent women who kneaded alongside us didn't look up. I was up to my elbows in the sticky dough, but I started to scrape it off so I could follow him. Jeb grinned, flashed a look at the unobserving women, and shook his head at me. Then he spun around and dashed out of the room before I could free myself. I froze there, no longer breathing. I stared at the three women-the young blonde from the bathing room, the salt-and-pepper braid, and the heavy-lidded mother-waiting for them to realize that they could kill me now. No Jeb, no gun, my hands trapped in the gluey dough-nothing to stop them. But the women kept on kneading and shaping, not seeming to realize this glaring truth. After a long, breathless moment, I started kneading again, too. My stillness would probably alert them to the situation sooner than if I kept working. Jeb was gone for an eternity. Perhaps he had meant that he needed to grind more flour. That seemed like the only explanation for his endless absence. â€Å"Took you long enough,† the salt-and-pepper-braid woman said when he got back, so I knew it wasn't just my imagination. Jeb dropped a heavy burlap sack to the floor with a deep thud. â€Å"That's a lot of flour there. You try carryin' it, Trudy.† Trudy snorted. â€Å"I imagine it took a lot of rest stops to get it this far.† Jeb grinned at her. â€Å"It sure did.† My heart, which had been thrumming like a bird's for the entire episode, settled into a less frantic rhythm. The next day we were cleaning mirrors in the room that housed the cornfield. Jeb told me this was something they had to do routinely, as the combination of humidity and dust caked the mirrors until the light was too dim to feed the plants. It was Ian, working with us again, who scaled the rickety wooden ladder while Jeb and I tried to keep the base steady. It was a difficult task, given Ian's weight and the homemade ladder's poor balance. By the end of the day, my arms were limp and aching. I didn't even notice until we were done and heading for the kitchen that the improvised holster Jeb always wore was empty. I gasped out loud, my knees locking like a startled colt's. My body tottered to a halt. â€Å"What's wrong, Wanda?† Jeb asked, too innocent. I would have answered if Ian hadn't been right beside him, watching my strange behavior with fascination in his vivid blue eyes. So I just gave Jeb a wide-eyed look of mingled disbelief and reproach, and then slowly began walking beside him again, shaking my head. Jeb chuckled. â€Å"What's that about?† Ian muttered to Jeb, as if I were deaf. â€Å"Beats me,† Jeb said; he lied as only a human could, smooth and guileless. He was a good liar, and I began to wonder if leaving the gun behind today, and leaving me alone yesterday, and all this effort forcing me into human company was his way of getting me killed without doing the job himself. Was the friendship all in my head? Another lie? This was my fourth day eating in the kitchen. Jeb, Ian, and I walked into the long, hot room-into a crowd of humans chatting in low voices about the day's events-and nothing happened. Nothing happened. There was no sudden silence. No one paused to stare daggers at me. No one seemed to notice us at all. Jeb steered me to an empty counter and then went to get enough bread for three. Ian lounged next to me, casually turning to the girl on his other side. It was the young blonde-he called her Paige. â€Å"How are things going? How are you holding up with Andy gone?† he asked her. â€Å"I'd be fine if I weren't so worried,† she told him, biting her lip. â€Å"He'll be home soon,† Ian assured her. â€Å"Jared always brings everyone home. He's got a real talent. We've had no accidents, no problems since he showed up. Andy will be fine.† My interest sparked when he mentioned Jared-and Melanie, so somnolent these days, stirred-but Ian didn't say anything else. He just patted Paige's shoulder and turned to take his food from Jeb. Jeb sat next to me and surveyed the room with a deep sense of satisfaction plain on his face. I looked around the room, too, trying to see what he saw. This must have been what it was usually like here, when I wasn't around. Only today I didn't seem to bother them. They must have been tired of letting me interrupt their lives. â€Å"Things are settling down,† Ian commented to Jeb. â€Å"Knew they would. We're all reasonable folks here.† I frowned to myself. â€Å"That's true, at the moment,† Ian said, laughing. â€Å"My brother's not around.† â€Å"Exactly,† Jeb agreed. It was interesting to me that Ian counted himself among the reasonable folks. Had he noticed that Jeb was unarmed? I was burning with curiosity, but I couldn't risk pointing it out in case he hadn't. The meal continued as it had begun. My novelty had apparently worn off. When the meal was over, Jeb said I deserved a rest. He walked me all the way to my door, playing the gentleman again. â€Å"Afternoon, Wanda,† he said, tipping his imaginary hat. I took a deep breath for bravery. â€Å"Jeb, wait.† â€Å"Yes?† â€Å"Jeb†¦Ã¢â‚¬  I hesitated, trying to find a polite way to put it. â€Å"I†¦ well, maybe it's stupid of me, but I sort of thought we were friends.† I scrutinized his face, looking for any change that might indicate that he was about to lie to me. He only looked kind, but what did I know of a liar's tells? â€Å"Of course we are, Wanda.† â€Å"Then why are you trying to get me killed?† His furry brows pulled together in surprise. â€Å"Now, why would you think that, honey?† I listed my evidence. â€Å"You didn't take the gun today. And yesterday you left me alone.† Jeb grinned. â€Å"I thought you hated that gun.† I waited for an answer. â€Å"Wanda, if I wanted you dead, you wouldn't have lasted that first day.† â€Å"I know,† I muttered, starting to feel embarrassed without understanding why. â€Å"That's why it's all so confusing.† Jeb laughed cheerfully. â€Å"No, I don't want you dead! That's the whole point, kid. I've been getting them all used to seeing you around, getting them to accept the situation without realizing it. It's like boiling a frog.† My forehead creased at the eccentric comparison. Jeb explained. â€Å"If you throw a frog in a pot of boiling water, it will hop right out. But if you put that frog in a pot of tepid water and slowly warm it, the frog doesn't figure out what's going on until it's too late. Boiled frog. It's just a matter of working by slow degrees.† I thought about that for a second-remembered how the humans had ignored me at lunch today. Jeb had gotten them used to me. The realization made me feel strangely hopeful. Hope was a silly thing in my situation, but it seeped into me anyway, coloring my perceptions more brightly than before. â€Å"Jeb?† â€Å"Yeah?† â€Å"Am I the frog or the water?† He laughed. â€Å"I'll leave that one for you to puzzle over. Self-examination is good for the soul.† He laughed again, louder this time, as he turned to leave. â€Å"No pun intended.† â€Å"Wait-can I ask one more?† â€Å"Sure. I'd say it's your turn anyway, after all I've asked you.† â€Å"Why are you my friend, Jeb?† He pursed his lips for a second, considering his answer. â€Å"You know I'm a curious man,† he began, and I nodded. â€Å"Well, I get to watch your souls a lot, but I never get to talk with 'em. I've had so many questions just piling up higher and higher†¦ Plus, I've always thought that if a person wants to, he can get along with just about anybody. I like putting my theories to the test. And see, here you are, one of the nicest gals I ever met. It's real interesting to have a soul as a friend, and it makes me feel super special that I've managed it.† He winked at me, bowed from the waist, and walked away. Just because I now understood Jeb's plan, it didn't make things easier when he escalated it. He never took the gun anywhere anymore. I didn't know where it was, but I was grateful that Jamie wasn't sleeping with it, at least. It made me a little nervous to have Jamie with me unprotected, but I decided he was actually in less danger without the gun. No one would feel the need to hurt him when he wasn't a threat. Besides, no one came looking for me anymore. Jeb started sending me on little errands. Run back to the kitchen for another roll, he was still hungry. Go fetch a bucket of water, this corner of the field was dry. Pull Jamie out of his class, Jeb needed to speak with him. Were the spinach sprouts up yet? Go and check. Did I remember my way through the south caves? Jeb had a message for Doc. Every time I had to carry out one of these simple directives, I was in a sweaty haze of fear. I concentrated on being invisible and walked as quickly as I could without running through the big rooms and the dark corridors. I tended to hug the walls and keep my eyes down. Occasionally, I would stop conversation the way I used to, but mostly I was ignored. The only time I felt in immediate danger of death was when I interrupted Sharon's class to get Jamie. The look Sharon gave me seemed designed to be followed by hostile action. But she let Jamie go with a nod after I choked out my whispered request, and when we were alone, he held my shaking hand and told me Sharon looked the same way at anyone who interrupted her class. The very worst was the time I had to find Doc, because Ian insisted on showing me the way. I could have refused, I suppose, but Jeb didn't have a problem with the arrangement, and that meant Jeb trusted Ian not to kill me. I was far from comfortable with testing that theory, but it seemed the test was inevitable. If Jeb was wrong to trust Ian, then Ian would find his opportunity soon enough. So I went with Ian through the long black southern tunnel as if it were a trial by fire. I lived through the first half. Doc got his message. He seemed unsurprised to see Ian tagging along beside me. Perhaps it was my imagination, but I thought they exchanged a significant glance. I half expected them to strap me to one of Doc's gurneys at that point. These rooms continued to make me feel nauseated. But Doc just thanked me and sent me on my way as if he were busy. I couldn't really tell what he was doing-he had several books open and stacks and stacks of papers that seemed to contain nothing but sketches. On the way back, curiosity overcame my fear. â€Å"Ian?† I asked, having a bit of difficulty saying the name for the first time. â€Å"Yes?† He sounded surprised that I'd addressed him. â€Å"Why haven't you killed me yet?† He snorted. â€Å"That's direct.† â€Å"You could, you know. Jeb might be annoyed, but I don't think he'd shoot you.† What was I saying? It sounded like I was trying to convince him. I bit my tongue. â€Å"I know,† he said, his tone complacent. It was quiet for a moment, just the sounds of our footsteps echoing, low and muffled, from the tunnel walls. â€Å"It doesn't seem fair,† Ian finally said. â€Å"I've been thinking about it a lot, and I can't see how killing you would make anything right. It would be like executing a private for a general's war crimes. Now, I don't buy all of Jeb's crazy theories-it would be nice to believe, sure, but just because you want something to be true doesn't make it that way. Whether he's right or wrong, though, you don't appear to mean us any harm. I have to admit, you seem honestly fond of that boy. It's very strange to watch. Anyway, as long as you don't put us in danger, it seems†¦ cruel to kill you. What's one more misfit in this place?† I thought about the word misfit for a moment. It might have been the truest description of me I'd ever heard. Where had I ever fit in? How strange that Ian, of all the humans, should have such a surprisingly gentle interior. I didn't realize that cruelty would seem a negative to him. He waited in silence while I considered all this. â€Å"If you don't want to kill me, then why did you come with me today?† I asked. He paused again before answering. â€Å"I'm not sure that†¦Ã¢â‚¬  He hesitated. â€Å"Jeb thinks things have calmed down, but I'm not completely sure about that. There're still a few people†¦ Anyway, Doc and I have been trying to keep an eye on you when we can. Just in case. Sending you down the south tunnel seemed like pushing your luck, to me. But that's what Jeb does best-he pushes luck as far as it will go.† â€Å"You†¦ you and Doc are trying to protect me?† â€Å"Strange world, isn't it?† It was a few seconds before I could answer. â€Å"The strangest,† I finally agreed.

Analysis of the Fast Food Industry Essay

Introduction Airline industry is the topic I researched in this analysis. Companies in this industry provide scheduled domestic and international passenger transportation, mail and freight transportation. Major US companies include American Airlines, Delta, Southwest, and United Continental, as well as the air operations of express delivery companies such as FedEx and UPS. The industry key survival factors are efficient operations, reliability of services, and safety. The drivers of change are internet economy, globalization, and low cost competition. Based on the key survival factors and drivers of change, large companies enjoy economies of scale in purchasing and the ability to provide more extensive services. Small airlines can compete by serving local or regional routes. All the information was collected from online journals, news, and research and report papers. The sources include industry reports such as Hoover, Bloomberg, and Forbes. The data was organized by folders and then summarized i nto Words before putting in the paper. Each source was written in a separate Word file every time it was used. The analysis uses the Porter’s 5 forces and PEST analysis. Key Survival Factors In airline industry, demand depends highly on the health of the economy, which affects spending on business and leisure air travel. Since many costs are fixed, efficient operations act as a core factor to determine the profitability of airlines companies. The basic operations of airlines include acquiring and maintaining airplanes and airport facilities, acquiring passengers and/or freight, managing staff, and operating flights. The flight equipment (airplanes) that an airline uses is crucial to efficient operations. The next key survival factor for airline industry is safety. Air traffic is growing rapidly, airports are more congested, and  Ã¢â‚¬Å"with two million passengers in the United States boarding more than 30,000 flights every day, maintaining that safety record will be a challenge.† Therefore, all airline companies should have a procedures encompassing the theory, investigation, categorization of flight failures, and the prevention of such failures through regulatio n, education, and training. The company could have lost the public image if they don’t have a procedure in advance to response quickly enough in case of emergency. Last but not least, reliability of service is another key survival factor for airline industry. A positive public image could be developed among customers due to a reputation for reliable services, which can lead to more repeat business. Reliability in the airlines industry includes: reports of mishandled baggage, the on-time arrival of flights, involuntary boarding denials from overbooking flights, and passenger complaints. Those airlines that are able to control these elements could provide better service to the customer, and thus offer more reliable service. Drivers of Change The internet and e-commerce has completely altered the airlines distribution (the booking and ticketing of passengers for air travel). Nowadays, travelers can book e-tickets on their flights through the airlines’ websites or a third-party website. This has allowed airlines to eliminate paperwork, reduce operational expenses, and bypass travel agent commissions. Moreover, the potential in the global travel market makes airlines companies focus more on globalization. To facilitate international growth, U.S. airlines are lobbying for â€Å"open skies† treaties between the U.S. and other nations. These treaties are bilateral agreements that essentially deregulate travel between the involved countries, thus opening up certain markets to competition. â€Å"The U.S. currently has signed more than 60 open skies treaties with nations around the globe.† Finally, the rise of the low-cost carriers has forced a change in the competitive environment of the air travel industry. Southwest, and JetBlue implement low-cost strategies that allow them to offer relatively low airfares. These low fares change the entire industry and force rivals to lower their costs and decrease their fares in order to stay competitive. Overall Assessment The airline industry is currently not very attractive. Both business and  tourist travel are reduced when the economy slows. â€Å"Global aviation traffic typically rises and falls at twice the pace of economic output, so a change in the economy can double the impact for airlines.† Because of relatively high fixed costs of airplanes, airport facilities, and labor, airlines can’t easily adjust to reduced passenger traffic. Based on the financial results on Hoover’s database, the industry has a very low growth rate of personal consumption expenditures as of 2014, and it was forecasted to grow at an annual compounded rate of 4 percent between 2014 and 2018. Works Cited Mouawad, Jad, and Christopher Drew. â€Å"Airline Industry at Its Safest Since the Dawn of the Jet Age.† The New York Times. The New York Times, 11 Feb. 2013. Web. 16 Feb. 2015. . â€Å"Competitive Environment of the Airline Industry.† Competitive Environment of the Airline Industry. Web. 16 Feb. 2015. . â€Å"Good times for the Airline Industry.† The Economist. The Economist Newspaper, 27 Dec. 2013. Web. 16 Feb. 2015. . Fulton, Jeff. â€Å"Airline Industry Key Success Factors.† EHow. Demand Media, 29 July 2009. Web. 16 Feb. 2015. .

Advanced Auditing Case 2.3

The client’s assertions that accounts receivable confirmation can effectively address are existence, rights, and valuation. b) When performing year-end sales cutoff tests, auditors hope to accomplish the objective of obtaining evidence from third parties to evaluate the client’s assertions of sales recorded for the period under audit. The client’s assertions that sales cutoff tests can effectively address are completeness and presentation. 2. Coopers Lybrand made several significant errors of judgment in its effort to confirm the Wow Wee receivable at the end of 1995. These errors of judgment include ignoring or overlooking red flags including: the 69% change in the percentage of factored accounts receivable from 1994 to 1995, the $2. 4 million in sales to Wow Wee booked in the final day of fiscal 1995, the fact that Wow Wee is a manufacturing company, the fact that Wow Wee was left out of the top 25 customers list when it was among the top 5 based on recorded sales, and the clearly falsified bill of lading. Coopers Lybrand failed to make the appropriate modifications to their planned audit procedures to examine these irregularities. Coopers Lybrand also failed to follow up on the confirmation of the Wow Wee receivable that they accepted from Goldberg. These errors of judgment involve extreme negligence on the part of the auditors. I would classify these errors as reckless as there is no evidence to support that Coopers Lybrand were involved in the fraud. I think that the auditors did not suspect that fraud would occur at Happiness Express in 1995 as they had previously audited Happiness Express in 1994 and rightfully issued an unqualified opinion. I think that the auditors believed that these were simple mistakes that did not need to be further examined. The company’s revenue grew so significantly from 1994 to 1995 and because of this, I think that is was easy for the auditors to believe that the employees were simply overwhelmed by the company’s alarming growth and made mistakes as a result. . Yes Coopers Lybrand should have confirmed the receivable from West Coast Liquidators at the end of fiscal 1995 because it represented 13%, a clearly material amount, of the total accounts receivable. They also should have included one or more of the sales to West Coast Liquidators in their year-end sales cutoff tests for 1995 as many of these transactions were booked in the final month of the fiscal year. Sales transactions occurring close to the end of the fiscal year are much more likely to be suspicious in nature or fraudulent than transactions occurring earlier in the year. 4. The alternative procedures that can be applied to a large receivable of an audit client when a confirmation cannot be obtained include examination of subsequent cash receipts, the matching of such receipts with the actual items paid for, and examination of shipping, or other client documentation. The evidence provided by these methods may differ from the evidence provided by confirmation of a receivable depending on the client’s documentation of the transaction. Typically, in a company with proper internal controls and documentation, alternative procedures should be able to effectively address the same assertions that the confirmation of a receivable address. At very least, alternative procedures provide evidence for the existence assertion. 5. According to AU Section 317. 7, auditors should be aware of the possibility that illegal acts, such as insider trading, may have occurred however, an audit made in accordance with GAAS provides no assurance that illegal acts will be detected or that any contingent liabilities that may result will be disclosed. In the event that an auditor discovers evidence concerning the existence of possible illegal acts that could have a material indirect effect on the financial statements, they should apply audit procedures directed to ascer tain whether an illegal act has occurred. Advanced Auditing Case 2.3 The client’s assertions that accounts receivable confirmation can effectively address are existence, rights, and valuation. b) When performing year-end sales cutoff tests, auditors hope to accomplish the objective of obtaining evidence from third parties to evaluate the client’s assertions of sales recorded for the period under audit. The client’s assertions that sales cutoff tests can effectively address are completeness and presentation. 2. Coopers Lybrand made several significant errors of judgment in its effort to confirm the Wow Wee receivable at the end of 1995. These errors of judgment include ignoring or overlooking red flags including: the 69% change in the percentage of factored accounts receivable from 1994 to 1995, the $2. 4 million in sales to Wow Wee booked in the final day of fiscal 1995, the fact that Wow Wee is a manufacturing company, the fact that Wow Wee was left out of the top 25 customers list when it was among the top 5 based on recorded sales, and the clearly falsified bill of lading. Coopers Lybrand failed to make the appropriate modifications to their planned audit procedures to examine these irregularities. Coopers Lybrand also failed to follow up on the confirmation of the Wow Wee receivable that they accepted from Goldberg. These errors of judgment involve extreme negligence on the part of the auditors. I would classify these errors as reckless as there is no evidence to support that Coopers Lybrand were involved in the fraud. I think that the auditors did not suspect that fraud would occur at Happiness Express in 1995 as they had previously audited Happiness Express in 1994 and rightfully issued an unqualified opinion. I think that the auditors believed that these were simple mistakes that did not need to be further examined. The company’s revenue grew so significantly from 1994 to 1995 and because of this, I think that is was easy for the auditors to believe that the employees were simply overwhelmed by the company’s alarming growth and made mistakes as a result. . Yes Coopers Lybrand should have confirmed the receivable from West Coast Liquidators at the end of fiscal 1995 because it represented 13%, a clearly material amount, of the total accounts receivable. They also should have included one or more of the sales to West Coast Liquidators in their year-end sales cutoff tests for 1995 as many of these transactions were booked in the final month of the fiscal year. Sales transactions occurring close to the end of the fiscal year are much more likely to be suspicious in nature or fraudulent than transactions occurring earlier in the year. 4. The alternative procedures that can be applied to a large receivable of an audit client when a confirmation cannot be obtained include examination of subsequent cash receipts, the matching of such receipts with the actual items paid for, and examination of shipping, or other client documentation. The evidence provided by these methods may differ from the evidence provided by confirmation of a receivable depending on the client’s documentation of the transaction. Typically, in a company with proper internal controls and documentation, alternative procedures should be able to effectively address the same assertions that the confirmation of a receivable address. At very least, alternative procedures provide evidence for the existence assertion. 5. According to AU Section 317. 7, auditors should be aware of the possibility that illegal acts, such as insider trading, may have occurred however, an audit made in accordance with GAAS provides no assurance that illegal acts will be detected or that any contingent liabilities that may result will be disclosed. In the event that an auditor discovers evidence concerning the existence of possible illegal acts that could have a material indirect effect on the financial statements, they should apply audit procedures directed to ascer tain whether an illegal act has occurred.

Public International Law Essay Example | Topics and Well Written Essays - 2000 words

Public International Law - Essay Example This led to the establishment of the international legal system. The main purpose of this system is to promote justice for all persons all around the world. This system has many advantages and benefits. However, many of the supporters of it seem to look through rose-colored glasses and ignore numerous shortcomings. In this work we will try to reveal positive and negative aspects of the international legal system with regard to the following issues: international antiterrorism law and recognition of new states. The urgent need for international legislation about the antiterrorism arose after the events of the 11th September, 2001. Before these events the international community relied more on diplomatic, economic and strategic means to manage international terrorism. But the attacks on the World Trade Centre and the Pentagon, the United States and the other countries of the world began to muse over more effective means to fight terrorism and now the international community decided to introduce a military response to it /Lozada, 2006/. Since that time antiterrorism legislation became a matter of global concern and closer investigation. It appeared that drafting and implementation of international antiterrorism laws is not an easy task because this law â€Å"crosses boundaries between states and between domestic, regional and international law as well as traditional disciplinary boundaries between administrative, constitutional, criminal, immigration, military law and the law of war† /Ramraj, Hor & Roach, 2005/. We will list some main problems of the international antiterrorism law, which influence its effectiveness in protection of all people. The first problem is the absence of single international definition of terrorism. The International Convention Against Terrorist Strikes with Explosives (1997) and the International Convention for the Persecution of Terrorist Financing (1999) tried to provide the definition of terrorism. However, like the

Are marketers responsible for the use of harmful products in society Essay

Are marketers responsible for the use of harmful products in society - Essay Example Society suffers tremendously when such harmful products are easily available. These products become so integrated in the lifestyles of people that consumers almost get addicted to them oblivious to the fact that these products are harming them. Why are these products marketed? Do marketers make such products so attractive that consumers over look the repercussions of their use or is it that the consumers have an existing demand for them that is why they are being manufactured and marketed. Such products have to be marketed within ethical boundaries or else the society will suffer immeasurable harm (Gandolf). Organizations today are encouraged to focus on being socially responsible. This means that they have to consider the interests of the society by taking the responsibility for the effects the firm’s activities has on its customers, stakeholders, employees, the community, the environment and all things involved in every step of its operations. This extends beyond the legal framework within which the company is required to work and is basically going a step further not to harm the society and helping make the society a better place. They should have business ethics and ideally produce products that are beneficial for the society. Today firms have incorporated CSR as an integral part of their long term strategic goals. This extends into different steps the product goes through-from the manufacturing stage till it reaches the consumer (Vass 2007). This also means that all the products should be marketed within ethical bounds keeping the interest of the society first in mind. With firms being socially more responsible, they are contributing tremendously towards improving the society. (Vass 2007). Making consumers more aware of the products and giving them a clearer picture through marketing enables the consumer to make a better choice for himself and thus a better

Foreign and Domestic Policy Issues from the 60's and Today Research Paper

Foreign and Domestic Policy Issues from the 60's and Today - Research Paper Example The first issue that president Obama needs to deal with is terrorism. Although terrorist threats on the US reached their height during the reign of George W Bush, Obama needs to devise new strategies of dealing with the problem. Terrorism is a global issue since it is still a problem in other parts of the globe. This indicates that the president needs to deal with the problem as a global issue and not an American issue. It is difficult for America to deal with terrorism without support from other countries. Although America has the military capabilities of dealing with any form of terrorism, the country still require collaboration with other nations (Koontz 107). For instance, the tactical arrest of Osama bin Laden proved America’s capabilities of dealing with terrorist criminals. However, the issue raised questions concerning lack of Pakistan involvement in the arrest. Thus, Obama needs to establish diplomatic relationship with leaders from other countries in order to solve t he current problems related to terrorism. President Obama also needs to address the current wars in Afghanistan and Iraq since it is affecting America’s credibility on the global stage. George W Bush was behind the war in his efforts to stop terrorism. These wars have similarities with the Vietnam War in the 1980s. Wars have no benefit to a country. In addition, there is no an absolute victor from a war. Thus, the president needs to reconsider America’s position on these wars. Like in the Vietnam War, America is losing millions of dollars due to its involvement in the war (Ellen web). In addition, the war has resulted into massive destruction of lives and property. America has lost hundreds of its soldiers in the wars. The latest incidence is increasing number of suicide cases among soldiers fighting in these countries. The continued involvement of America in the Iraq and Afghanistan wars is contributing to the problems been experienced by the country. America needs to create a systematic withdrawal of its forces from Afghanistan and Iraq within the shortest time possible. The role of regime change that America has played in the two countries should be left the UN. The US also needs to separate its war against terrorism from war against Islam. Although most terrorist have an Islamic background, Islam and terrorism have no relationship. There have been allegations that America is fighting Islam through its global efforts to eliminate terrorism. President Obama has an obligation to free America from these allegations by ordering the withdrawal of American forces from Iraq and Afghanistan. In addition, America needs to be accountable for the crimes committed by its forces in the two countries (Brook web). This will free America from accusations of double standards in dealing with crime against humanity. Gay marriages and gay rights have also remained a controversial issue in America. Although America is a multicultural society, it has a global socia l obligation. In addition America is been looked upon by the rest of the global population. Thus, mistakes committed by Americans are likely to be repeated by the rest of the globe. Gay people have the rights to live as other ordinary individuals do. In addition, they have the rights of upgrading their relationship into marriages. America has high social standards and integration than the rest of the world. Thus, Americans needs to reconsid

What is main causes of obesity for teenagers in USA Annotated Bibliography

What is main causes of obesity for teenagers in USA - Annotated Bibliography Example Additionally, the resource is reliable and written by qualified authors who undertook intense research process to compile the facts and figures. Therefore, observing from these established facts, this reference is key to the course of the research paper. This publication identifies with the purpose of the research paper. Boy Scouts of America (BSA) is a publication established from the Boy Scouts of America movement established under the inspiration of the Boy Scout Association. The BSA incorporates boys between ages fourteen to eighteen and institutes several programs for helping and supporting the society in their surroundings. This publication is key to the study into obesity among the teens as it is from teenagers’ organization. Notably, it facilitates a description of the various elements that are causative agents to obesity among the teenagers. The publication therefore features accordingly as a reliable information source for the paper. Additionally, the article reflects accordingly in the intent of the research paper, including discussing the essential points that directly affect the development of the dissertation. Thus, I use this reference from the establishments of the factual information in this research study. Paul Insel is a clinical professor of psychiatry and behavioral sciences at Stanford university school of medicine. Turner and Ross are also established professionals in psychology and behavioral sciences. The American Diabetic Association is key in addressing the challenges influencing the health crisis resulting in obesity. In this publication â€Å"Discovering Nutrition†, they all bring their established professional finings regarding the subject of obesity. They facilitate studies involving health education and nutrition as they relate. The objectives of the publication relate accordingly to the purpose of the research proposal of understanding the causes of

A Technology World That Centers On the User Assignment

A Technology World That Centers On the User - Assignment Example As business practitioners learned, the main concern for enterprises is to satisfy the customers’ needs; otherwise, organizations fail. The phenomenon seems to be more glaring in technology-based industries because of the magnified applications that have been offered and presented by the digital world. It is therefore true that the increasing use of consumers of wide range of demographical factors and locations of the internet seemed to endanger other traditional products: books, newspapers, among others. More so, if Bilton’s future prognosis encompasses linking even the television medium to the internet to offer more personalized services, the more that marketing strategies would be designed to innovatively cater to unique and distinct consumer needs. Bilton’s article supported the enthusiasm of consumers to patronize services and products offered through the internet, mobile phones and other technological gadgets due to the fact that consumers are placed in the center of the design. By emphasizing the abilities to benefit the clientele and address the intricate and varied needs, the digital world’s success would be ensured. Works Cited Bilton, Nick. "A Tech World That Centers on the User." New York Times 12 September 2010: 1-2.Web. 13 July 2011.

Working Conditions Essay Example | Topics and Well Written Essays - 1000 words

Working Conditions - Essay Example According to Andre and Manuel - ' this  principle holds that the morally right course of action in any situation is the one that produces the greatest balance of benefits over harms for everyone affected' (Andre, 2010).  I absolutely agree in supporting the detailed recommendations  of  Human Rights Watch  enlisted below (Compa, 2005). New federal and state laws should reduce line speed in meat and poultry plants and establish new ergonomics standards to reduce repetitive stress injuries. Health and safety authorities should apply stronger enforcement measures. States should develop stronger worker compensation laws and enforcement mechanisms. Employers should not engage in aggressive, intimidating anti-organizing campaigns that take advantage of loopholes and weaknesses in the  U.S.  labor law system. Congress should enact legislation bringing  U.S.  labor law into compliance with international standards (e.g. to prohibit the permanent replacement of striking worke rs) and should also create stronger remedies for violations of workers’ rights. New laws and policies should ensure respect for the human rights of immigrant workers, whatever their legal status. Immigrants should have the same workplace protections as non-immigrants, including coverage under fair labor standards and other labor laws, and the same remedies when their rights are violated   A hog worker from  North Carolina  quotes â€Å"The line is so fast there is no time to sharpen the knife. The knife gets dull and you have to cut harder. That’s when you cut yourself.† If a worker really loses limb or life, who is there to lend a helping hand to his family to earn daily living. Ethically, the employers should open their eyes and weigh the resulting benefits and harms of policies that are  forced upon the workers in meat and poultry industry. The  Ã‚  Ã‚  increase in volume and speed of production  Ã‚  Ã‚  should be backed with quality training and sufficient safeguards making the work less hazardous.  Employers should choose the course of action that provides greatest benefits to the  workers who make up to 30,000 hard-cutting motions with sharp knives in a shift and often become victim of long-term occupational injuries and frequent lacerations. Investigations done by Human Rights Watch have shown that workers often do not  receive compensation for injuries at workplace because companies do not report injuries. The claims are delayed and denied; reprisals are  inflicted  on workers who file them. Workers are loved  as  long as  they are healthy and capable of working like a dog. But once they get hurt,  company will find a reason to fire them or put  them in a terrible job or change the shift so that worker quits.  Ã‚  Therefore, lot of people just work with the pain without reporting their injuries.  To overcome such situations, according to deontology, a right choice conforms to a moral norm. Such n orms are made simply to be obeyed by each moral agent in spite of maximizing such norm-keepings .For deontologists the Right has priority over the Good. If an action is not in accord with the Right, it may not be performed; no matter the Good that it might (Alexander 2008).  In an investigation conducted by Jamie Fellner, director of the U.S. Program at Human Rights Watch, the fact  revealed was that often Public agencies try to protect consumers from tainted meat but do very little to  Ã‚  protect their workers from  unhealthy and terrible conditions. It is also reported that aggressive and unlawful company try to derail workers’ organizing efforts. Employers threat workers who try to defend themselves

Bad News Message - Revised Version Assignment Example | Topics and Well Written Essays - 500 words

Bad News Message - Revised Version - Assignment Example I hope you can appreciate that we must draw a line in the sand when it comes to warranties of this type and remain committed to these restrictions. If we did not do this, our company would be inundated with requests for free repairs, which would prevent us from being able to provide the equipment that we do at the competitive price that we offer. We believe that any errors in manufacturing would quickly become apparent, and feel that offering a two year replacement window provides ample coverage for any breakdowns that occur due to mistakes on your part. Equipment of this sort, unfortunately, is subject to significant wear and tear, and it is simply impossible for us to make an exception in any one case, as this would make it necessary to make a similar exception each time this issue arises. We also offer extended service warranties on everything that we sell for a nominal price. If you are concerned about equipment breaking down, you may want to consider such extended coverage in the future, which includes a five year warranty, on-site service, and 24 hours a day, 365 days a year phone service Furthermore, because of the difficulty that you have encountered with this product, we are prepared to offer you a single-use discount coupon, which will give you a percentage off the cost of a new or refurbished piece of equipment I am sorry that I was not able to provide a refund or replacement to your equipment, and hope you understand my position in this case. If you are interested in pursuing any of the options listed above, please feel free to email me at albot.royal@compus.co, or call me at 555-555-5555. If you have any other questions or concerns, please do not hesitate to contact

Hunting and mindset Essay Example for Free

Hunting and mindset Essay I believe if you have a fixed mindset it’s never too late to change and adapt to a growth mindset. The growth mindset will lead you to try new things but a fixed mindset will stop you in your tracks causing you only to fail. The type of mindset you have is very important because it will influence your life in many ways. What is the difference between a growth and fixed mindset? Well a growth or positive mindset leads to a desire to learn and therefore a tendency to embrace challenges, persist in the face of setbacks, see effort as the path to mastery, and learn from criticism, and find lessons in the success of others. As a result you will reach even higher levels of achievement. A fixed or negative mindset leads to a tendency to look smart at any cost. Therefore a tendency to avoid challenges, give up easily, see effort as fruitless or worse, ignore useful negative feedback, and feel threatened by the success of others. As a result you will plateau early and achieve less than your full potential. Some of the ways a positive mind set affected my life happened early in my life. For example when I was ten years old I went to camp seven hills and took on archery. It was really hard but I learned it very quickly and never gave up. When I got home from camp I asked my dad if I could go hunting with him once I was old enough and he told me girls cant hunt we are too weak. Because I had a growth mindset I never gave up I practiced without my father every day for three years. I got my hunting license when I was thirteen and went with my friend mike and his parents to their cabin in Olean NY. It was really cold out that day I remember shaking while perched up in my tree I wanted to give up so bad but I wanted to prove my dad wrong and show him that girls can hunt. Finally a 8 point buck walks in my range I got my bow ready and breathing slowly I pull back the arrow aim for the kill spot let go WAMM right threw his lungs. I was so excited knowing I just proved to my father that I can do anything I put my mind to. After I turned fifteen I started to develop more of a fixed mindset towards school which affected my life in many ways. It all started with failing one test and my life spiraled downhill from there. It was 2003 and I thought I was on top of the world I could pass any test without studying and I thought I knew everything, but what I didn’t know is how this stuck up attitude was going to change my life in a huge way. I walked into my class head in the clouds sad down and looked at my test â€Å"spelling ha this is going to be easy† I muttered. I flew through the test handed it in and walked out. The next day I got to class and my teacher handed me my test my jaw dropped â€Å"this has to be a mistake I couldn’t of got only a 63% on my test you had to grade it wrong† I yelled to the teacher. She gave me detention for yelling at her in class but I didn’t bother going I was so mad. I started skipping school and going to parties because at this point I started not to care anymore. When I got home one day my dad grounded me because the school called him and mentioned my behavior to him. I was so mad I ran away from home and started drinking and doing drugs. This caused me to get put in a detention center when I was sixteen and when I got out I moved in with my mother because she didn’t care what I did. Now twenty-three I have started to work at getting back into a positive mindset so I can be a good role model for my daughter. In order for someone to adopt a growth mindset, they would have to care about what their mindset is, understand why they act the way they do, and understand that they can change, and the reason for change, which would be to become a better person, which they would also have to care about. Our mindset will affect us in many ways and it can also affect the people around us which are why we should try to keep a growth mindset.

The Autobiography of Benjamin Franklin Essay Example for Free

The Autobiography of Benjamin Franklin Essay The book â€Å"The Autobiography of Benjamin Franklin† is a decisively written personal story of the one of the most famous Presidents in the US history – Benjamin Franklin. The book is very intimate as the author tells the story of his childhood and his way to future values and beliefs. It is necessary to agree with Franklin’s idea that people should always strive for self-improvement and self-perfection. Therefore, Franklin decided to develop effective communication skills and meaningful techniques of conduct. He seems to be the person to follow. During the years of American Revolution Benjamin Franklin showed himself as an ardent proponent of political and economic independence of the country. Actually, he had all the makings to become a clever President. The autobiography is very rich because Franklin was also one of the Founding Fathers and American ambassador to France. I liked the idea he told about printing trade and â€Å"Poor Richard’s Almanac†. Franklin allowed people to share his fears and hopes to make country powerful and independent. Furthermore, his humility for his country and citizens is to be admired. When reading the book is becomes clear that Franklin is interested in the reading habits of people. Moreover, he notes that such people are provided with poetic souls. He admired this quality in people the most. Apparently, Franklin’s though is marked bys strong pragmatic tendencies because he is less concerned with ideals, rather with functions and work. Such pragmatism results a list of core virtues and values making the book striking and impressive. Nevertheless, Franklin is considered practical men and all those virtues are practical as well. He argues if idea is simple it is easily applied. Franklin wasn’t interested in abstract morality. The mentioned above humility belongs to the list of his virtues. And I agree with him that humility is important for people as it reflects their beings. As for me, the book is brilliantly written and ensures enjoyable reading. References Franklin, Benjamin. (1996). The Autobiography of Benjamin Franklin. USA: Dover Thrift Publications.

Financial Analysis of the Coca Cola company

Financial Analysis of the Coca Cola company The Coca-Cola Company (founded in 1919 Georgia, USA) today is the largest global manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world. Its strategy is to become more competitive by using its vast assets-brands, financial strength, unrivalled distribution system and the strong commitment by management and employees worldwide. This report analyses Coca Colas financial performance during the period from 2005 to 2009 through the following steps: 1. Industry analysis 2. Firm Analysis 3. Financial Analysis in comparison with PepsiCo and the industry. 4. Evaluation and Conclusion The entire industry is under pressure because of currency fluctuations and high fuel prices. It cannot be concluded, however, that the beverage industry is being threatened more than other industries. The main threat is increasing consumer and regulatory awareness on health and nutrition considerations. There are 3 big players in the beverage industry. Buyers power and rivalry is quite significant throughout the industry. Coca Colas strengths are based on its global resources such as brand value, marketing innovation, strong capital base and distribution channels. Coca-Cola has achieved impressive profits records and ROCE exceeding by far the industry norms and PepsiCo. Although Coca Cola maintains low liquidity ratios, its ability to turnover the stock within a short period of 39 days and enjoy longer credit period with its suppliers, give sufficient comfort to meet its financial obligations. This implies that Coca-Cola has strong bargaining power. Historically, Coca-Colas dividend payouts have been over 50% of the net income of any given period. It is observed that Coca-Colas debt-financing strategy justifies the reasons for maintaining high debt-to-assets and debt-to equity ratios. Coca-Cola has the largest market share in the beverage industry and has a market capitalization of US$102bn which is far above an industry average of US$75bn. Coca Colas profits have steadily grown above industry norms and operational efficiency is quite impressive as indicated by revenue/employee which are twice as high as its main competitor and the industry. However, ROA declined year-by-year from 2005 thru 2009 couple with a decline in the share price. Nonetheless, the new leadership and management team has managed to improve the performance as evidenced by the excellent Q-3 2009 financial results and the resultant increase in EPS. Coca Cola has sound risk management policies that have enabled it to remain stable given the high foreign currency fluctuation, interest rate risks and political instability associated with the wide operation in over 200 countries. In particular, introduction, revision and implementation of effective marketing strategies, quick-decision-making, effective asset utilization, overall asset management policies and the dividend payout policies need immediate management attention, in view of the competitive nature of the beverage industry. Otherwise Coca-Cola may lose more grounds to its competitors. Table of Contents 1 Introduction.5 2 Macro Industry Analysis .6 3 Micro Industry Analysis ..7 4 Financial Analysis9 4.1 Profitability.9 4.2 Liquidity and Funds Management.10 4.3 Asset Management12 5 Evaluation.13 6 Conclusion14 7 References..15 8 Appendices 8.1 Appendix I Definitions of ratios used in the financial analysis.16 8.2 Appendix II Coca Colas Financial Ratios..20 8.3 Appendix III PepsiCo Financial Ratios22 8.4 Appendix VI Financial Statements 8.4.1 Coca Cola Financial Statements 8.4.2 PepsiCo Financial Statements 1 Introduction Coca-Cola (the beverage) was invented in May, 1886, in Atlanta, Georgia and the first drink was sold at a soda fountain in Jacobs Pharmacy in Atlanta by Willis Venable. The idea was if he could just get people to try Coca-Cola they Would buy it. History proved him right. In the beginning sales of Coca-Cola accumulated 50 US$ for the first year. Today the Coca-Cola Company is the largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world. The company provides a wide variety of non-alcoholic beverages, including carbonated soft drinks, juices and juice drinks, sports drinks, water products, teas, coffees and other beverages. Along with Coca Cola, this is recognized as the Worlds most valuable brand, the company markets four of the worlds top five Soft-drink brands, including Diet Coke, Fanta and Sprite. The companys main rival is the PepsiCo, although Coca Cola considers Tap water a long-term-indirect competitor. (Newstarget.com) Coca Colas global operating structure includes the following operating segments: North America, Africa, Asia, Europe Eurasia and Middle East, Latin America and Corporate. This report analyses Coca Colas financial performance. The structure of the report is as follows: à ´Ã¢â€š ¬Ã¢â‚¬Å¡Ã¢â‚¬ ° The first part of the report includes a Macro and Micro industry analysis in which the beverage industry is analyzed The second part is the Firm Analysis, which highlights Coca Colas Capabilities, Competences and Recourses The core of the report is the Financial Analysis, in which Coca Colas financial ratios are compared with its main competitor (PepsiCo) and with (the non-alcoholic beverage) industrys standards where possible Finally the report ends up with an evaluation and a conclusion 2 Macro Industry Analysis As a global company operating within the soft-drink industry, Coca Cola has to content with the traditional Macro Environmental factors. The applicable laws within the United States and in many countries around the world impose restrictions for Coca Cola and the beverage industry. New deposit laws in the United States and in Europe require beverage bottlers and distributors charge a refundable deposit on beverage containers. Implementing this system requires significant capital investment to develop the capability to handle and process empty beverage containers. (Reuters). Many continue to associate health risks with consuming carbonized drinks. A recent study in the United States links the consumption of soft drinks with Type 2 diabetes and weight gain. This idea is supported somewhat by the medical community with statements such as: Anyone who cares about his/her health or the health of their family would not consume these beverages. Although this study was localized within the United States, from a Political and Legal perspective it has potential global implications throughout the industry. Beverage industry is affected, by a number of Economical factors that range from the cost to manufacture and distribute products, to foreign currency exchange fluctuations, fuel prices and weather patterns. Coca Cola has a global manufacturing network and it is also affected by these and other economical factors. For example Nestles (50% owned by Coca-Cola) sales increased with 12.6% in 2005 but due to the impact of foreign exchange rate the sales decreased by 6.3%. (www.dailyreporter.com) Danones profits margins have also been significantly affected by the increase in oil costs and hence, decided to increase their prices by up-to 12%. However it cannot be concluded that the beverage industry is more vulnerable than other industries. The beverage industry also faces environmental challenges. In India, for instance, where there is a serious shortage of water supply, the industry giants were strongly criticized on their use of water that constitutes 90% of the raw materials. This could invite governments to introduce new legislations that may have global implications on the global industry. Additionally, the company experienced culturally imposed operating restrictions when marketing its product in some countries, due to risks related to the socio-cultural factors such as obesity, that have potential adverse effects on the beverage industry. (NewsTarget.com) 3 Micro Industry Analysis The non-alcoholic sector is dominated by three major players, which together control 90% of the global market. However, the rivalry is fierce among the competitors: Nestle, Cadbury Sweppes PLC, Groupe Danone and Kraft Foods, with PepsiCo being the number one Rival for Coke. Coca Cola focuses primarily on carbonated soft drinks and fruit juices, while all of it competitors supply the market with other food products in addition to soft drinks. Coca Cola is continuing its diversification efforts, however and now owns 50% of Nestle, which currently dominates bottled water sales in some regions. Nonetheless, as a result of its past focus of relying primarily on the soft drink market, Coca Cola more vulnerable to fluctuating market conditions than its competitors. The non-alcoholic beverages market remains somewhat vulnerable to the threat of substitutes. The market has become saturated with the introduction of an array of soft drinks, sports drinks and bottled waters. By its own admission , Coca Cola considers tap water one of the main Substitute Products, and possibly a long-term indirect threat. Although many consider the consumption of soft drinks such as Coke (and Pepsi) a social event, the need to quench thrust remains a primary factor. Coca cola views the ready availability of tap water as a long-term threat, especially considering the decreasing reputation of carbonized soft drinks. One of the most significant threats to the beverage industry and Coca Cola is that of buyers power. Consumers can change their decision to buy at once. In 1985 for example, Coca-Cola decided to change the taste of its Cola. The consumers stopped buying Coca Cola even though taste tests demonstrated an improvement. (Hoovers) Coca Cola has long enjoyed limited vulnerability to Suppliers Power. Coca Cola maintains a solid position. Several resources providing global access to the main ingredients, such as Sugar, Artificial Sweeteners and Fruit Juice. However, this can change somewhat because Coca Cola recently experienced some limitation with the availability of raw materials due to increased activity in India. (Reuters) The key to success for all beverage companies is differentiation. The right product along with an effective marketing and branding campaign could create a formula for success. However, when it comes to New Entrants, it is unlikely that new entrants are going to form any creditable threat. Competition from PepsiCo remains the main threat for Coca-Cola. 5 Financial Analysis The financial analysis is based on the consolidated audited accounts of Coca-Cola Company and Subsidiaries made-out by Ernst Young for the past 4 years from 2005 to 2009 and comparisons are made against one of its main rivals PepsiCo. The accounts have been prepared in accordance with USA generally accepted accounting principles and standards of Public Company Accounting Oversight Board. The audited accounts / reports bear an unqualified auditors opinion. 5.1 Profitability Coca- Cola has been able to maintain impressive gross profit margins (GPMs) during 2005 to 2009 ranged between 66% and 63% which is better than its main competitor PepsiCo, whose GPMs from2005 thru 2009 stood consistently at 54% and industry standard of 42.28% (http://yahoo.finance.com). NET REVENUE Apparently, the cost structure of Coca-Cola and its overall cost-position is relatively better than PepsiCo although PepsiCo was able to achieve higher revenues than Coca-Cola by up-to 33%. This is further evidenced by the cost-to revenue ratio which was in the range of 75% and 69% for Coca-Cola and 82% and 83% for PepsiCo. NET INCOME Further, better overall cost-position by over 50%, and prudent cost-control enabled Coca-Cola to comparatively achieve better net incomes than PepsiCo as indicated by Net-Profit-Margin (NPM). On an average basis (from 2005 thru 2009) Coca-Cocas NPM stands at 29.815% higher than PepsiCos 18.765% by 59%. 5.2 Liquidity and Funds Management While current ratios for both companies are maintained at a reasonable standard of above 1:1 and are constant over the four years, quick ratios are also maintained at almost 1:1 and hence found to be relatively reasonable in meeting the short-term financial obligations. The cash ratio stands at 0.62:1 (slightly higher than PepsiCos 0.51:1) in 2009 which has improved, compared to 0.44:1, 0.32:1 and 0.23:1 in 2008, 2007 and 2006 respectively, mainly due to the increase in cash and cash equivalents balances to US$6.71bn in 2009 from US$3.36bn in 2008, US$2.13bn in 2007 and US$1.88bn in 2006. Generally, Coca-Cola has been maintaining better cash ratios than PepsiCo. CASH GENERATED FROM OPERATING ACTIVITIES TO MATURING OBLIGATIONS Furthermore, although cash provided by operating activities have been steadily increasing at an overall growth rate of over 10%, Coca-Colas Cash-Generated-from-Operations-to-Maturing-Obligation (CGOMO) ratio declined to 0.59:1 in 2009 from 0.58 and 0.54 in 2008 and 2007 respectively due to the increase in current liabilities by over 39%. The key components to the overall increase in current liabilities are: à ¢Ã¢â€š ¬Ã‚ ¢ Increase of maturities of the long-term debt to US$1.5bn in 2009 from US$0.3bn, US$.18bn, US$0.1.6bn and US$1.4 in 2008, 2007, 2006 and 2005 respectively. à ¢Ã¢â€š ¬Ã‚ ¢ Increase of loans and notes payable to US$4.5bn in 2009 from US$2.6bn in 2008, US$2.5bn in 2007, US$3.7bn in 2006 and US$3.0 in 2005. Nonetheless, there shouldnt be major concerns as Coca-Colas ability to collect its debts within 35 39 days and pay its creditors in almost 200 days while turning over its stock in 63 days, giving sufficient comfort to meet its financial obligations. Coca Cola has strategized in 2005 that by 2009 it intends to generate cash from its operating activities to the extent of 39 billion us$ 5.3 Asset Management Comparatively, Coca-Colas average stock holding period of 64 days is higher than PepsiCos 40 days, as indicated (STR in 2009). The trend shows that both companies have been consistently maintaining their STRs at almost the same levels. The better PepsiCos ratio could be attributed to the diversified nature of its product lines to include foods as compared to Coca Cola which is purely in drinks. Therere negligible differences in the debt collection periods where the number of days range between 35 and 39 for both Coca-Cola and PepsiCo, which is considered reasonable in an industry which is highly competitive and where the norm is 60 days. This implies that both companies have the competitive edge that may enable them to avoid tiding-up the capital in the receivables and generate sufficient cash to meet their short term financial obligations. Credit payment period shows Coca-Cola enjoys a longer credit period of almost 200 days than PepsiCos 147 days. This implies that Coca-Cola has st ronger bargaining-power than PepsiCo, thus basically gives Coca-Cola a free interest loan. Notably, the fundamental difference in asset management policies between Coca-Cola and PepsiCo is Equity-method-investments by Coca-Cola which historically is among the key components of its asset-base. Coca Cola key Asset Components in 2009 6 Evaluation The global beverage industry is highly regulated and instabilities, changes and uncertainties in worlds political and economic environments pose risks and challenges to the beverage companies, especially those which operate in a global fashion. The sluggish global economy, budget deficits of major economic powers, steep rise in oil prices and sharp currency fluctuations are matters of concern in general that may potentially have adverse implications and put the profit margins under pressure for many companies. This is due to the increase in energy cost needed to run the plants and transport the products to the marketplace. Competition in the beverage industry is fierce; companies that are not widely diversified remain more vulnerable to threats such as, rivalry, buyers and suppliers powers. Product substitution and new entrants form a minor threat in the beverage industry. Coca-Cola, the largest global company with the largest market share in the beverage industry, has a market capitalization of US$102bn which is far above an industry average of US$75bn and slightly higher than PepsiCos US$98bn. Its global presence, wide and reliable distribution channels, strong capital and asset base and global brand recognition provide it with a competitive edge over its rivals and in achieving better economies of scale. However, ROA declined year-by-year from 2009 thru 2005 couple with a decline in the share price. Nonetheless, the new leadership and management team has managed to improve the performance as evidenced by the excellent Q-3 2009 financial results and the resultant increase in EPS. 7 Conclusion Coca Colas leadership and management structure and the overall organizational culture have recently been initiated by hiring the new CEO (E Neville), who now focuses on revamping the organizational structure and the strategies. His primary objectives are to promote Coca Colas historical strengths such as innovation, motivation, training and development, knowledge management and blow-up the bureaucracy that has long been existing in the company in order to achieve sustainable growth and competitiveness. Coca Cola has got sound risk management policies that have enabled it to remain stable given the high foreign currency fluctuation, interest rate risks and political instability in view of the wide operation in over 200 countries. In particular, introduction, revision and implementation of effective marketing strategies, quick-decision-making, effective asset utilization, overall asset management policies and the dividend payout policies need immediate management action in view of the competitive nature of the beverage industry, Otherwise Coca-Cola may lose more grounds to its competitors. The overall financial position of Coca Cola is fantastically sound. The notable decline in ROA is not a matter of great concern particularly when the companys leadership and management team has got a breath of fresh air whose effectiveness is evidenced following the announcement of impressive Q3 2005 financial performance. The new CEO (E Neville) may have set a new course for the worlds number 1 soft drink giant.

International Relations Essay -- Political Science

Introduction: At the end of WWII in 1945, Western Europe and arguably the entire world looked to the United States for a recovery plan. Great Britain was loosing control over its colonies, France and Germany had been destroyed by the war, and the Soviet Union was gaining power. This put the United States in a position of power, the question that arises with this is, does the United States try to gain control as the hegemonic power in the international system? Is there a real necessity in the region of the Middle East to gain the hegemonic power in terms of U.S national interest/security? International Relation realists would say of course there is. Within the discipline of International Relations there are several paradigms and theories, one of the most enduring paradigms is realism. Realist believe that states are self- interested, power-seeking rational actors, who seek to maximize their security and chances of survival; cooperation between states can be explained as functional in order to maximize each individual state’s security. I think that this is right because if a state does not maintain its sovereignty and express its power in a visible manor other states will attempt to gain control over it; it would be the pre-colonial period all over again. This brings us back to the post WWII era- where states are fighting for their sovereignty and the United States has the opportunity to become the hegemonic power. Becoming the hegemonic power would involve having influence in several strategic regions of the world, one of the most important, and arguably the most important outside of Western Europe, the Middle East. Foreign Policy toward the Middle East pre-WWII was mostly dealing with Great Britain, post-WWII it can be at... ...p://www.jstor.org/stable/1949949 Kupchan, Charles. â€Å" The Persian Gulf and the West: the Dilemmas of Security.† Boston: Allen & Unwin, 1987 Lesch, David W.ed. The Middle East and The United States. Boulder, CO: Westview Press, 2007 Ovendale, Ritchie. â€Å"Britain, the United States, and the Transfer of Power in the Middle East, 1945-1962† NY: Leicester University Press Seabury, Peter. â€Å"The League of Arab States: Debacle of Regional Arrangement† International Organization 3, No. 4 (Nov. 1949) http://www.jstor.org/stable/2703618 Sluglett, Peter â€Å" The Pan-Arab Movement and the Influence of Cairo and Moscow,† in A Revolutionary Year: The Middle East in 1958, ed. Roger Louis and Roger Owen . New York: I.B. Tauris, Publishers, 2002 Spiegel, Steven. "Neighborhood Watch, Democracy: A Journal of Ideas 4 (2007) http://www.democracyjournal.org/article.php?ID=6520

Cognitive Effects of Early Bilingualism Essay -- Bilingualism, Consequ

The American educational system has fallen behind other leading nations in the world in many respects, one of which is in bilingual instruction. This has traditionally been overlooked in the United States until the high school level. American children should be better prepared for the growing globalism and technological advances instead of losing educational opportunities due to lack of foresight. One necessary step is to introduce second language acquisition earlier in the education program. In addition to purely economic reasons, the positive effects to the cognitive development of the brain when introduced to a second language are many. The age of acquisition is crucial due to the plasticity of the brain which, according to the critical period hypothesis, begins to plateau after five years of age(Bialystok, 2012). The current policy in early education limits greatly the amount of extracurricular lessons provided in accordance with government policies such as No Child Left B ehind, which restricts school funding based on standardized testing only in certain subject areas. School programs, realistically beginning in elementary education, should include foreign language study due to the strong evidence that bilingualism in children can develop higher cognitive abilities which can be enhanced with proficiency and positively influence skills in other areas. Old arguments suggest that, â€Å"children who are instructed bilingually from an early age will suffer cognitive or intellectual retardation in comparison with their monolingually instructed counterparts† (Diaz 24). Much of the research from the past supporting this argument focused on older bilinguals, mostly adults who may have shown competent abilities in a second langu... ...pact of Bilingualism on Cognitive Development.† Review of Research in Education 10 (1983): 23-54 Dijkstra, Ton. â€Å"Task and Context Effects in Bilingual Lexical Processing.† Cognitive Aspects of Bilingualism (2007): 213-235. Garcia-Sierra, Adrian, Randy L. Diehl, and Craig Champlin. â€Å"Testing the double phonemic boundary in bilinguals.† Speech Communication 51 (2009): 369-378. Kovacs, Agnes Melinda. â€Å"Beyond Language: Childhood Bilingualism Enhances High- level Cognitive Functions.† Cognitive Aspects of Bilingualism (2007): 301-323. Mechelli, A., Crinion, J. T., Noppeney, U., O’Doherty, J., Ashburner, J., Frackowiak, R. S., and Price, C.J. 2004. Structural plasticity in the bilingual brain. Nature. 431: 754. Siegal, Michael, Laura Iozzi, and Luca Surian. â€Å"Bilingualism and conversational understanding in young children.† Cognition 110 (2009): 115-122.

Physics and Firearms :: physics firearm gun guns ballistics

So you are into reloading and you wonder how well that little package with 77 grains of IMR 4350 powder behind a 300 grain round nose, full metal jacket bullet will do. Well, you can do two things, a little bit of physics calculations, or go out and touch it off, hoping that it doesn’t explode in the barrel! I would choose to do a little physics myself†¦ By using some basic physics equations, you can figure out just about any part of the rifles ballistics data. For instance, if you know a few variables, you can predict range with physics, or if you like you can figure things like drag on the bullet, pressure and expansion values inside the gun, on the bullet and much more, all from physics. So, lets take a look at both the potential and kinetic energies of the .338 Winchester magnum. I will use a load given by the Winchester Reloading manual, which can be found online at: http://www.winchester.com/reloader/index.html This load is a 300 grain bullet, using 59.8 grains of Winchester 760 powder, and this gives a muzzle velocity of 2285 ft/sec. For potential energy we know that PE=mgh, where PE= Potential Energy, m=mass, g=acceleration due to gravity, and h=height. So for a 300-grain bullet, the potential energy is calculated by first finding the mass. To do this, take 300grains/7000grains/pound. This gives you a value of .042857lbs. Then we need to convert pounds to slugs (slugs are the units of mass†¦) .042857lb/32.2ft/s^2=.001331slugs. Now we can calculate the potential energy of our 300-grain bullet. We will assume that h=six feet, since that is roughly the height of the barrel when I shoot from a standing position. So, since PE=mgh, we get PE=(.00133slugs)(32.2ft/sec^2)(6ft)=.256956lbft. The answer is pretty much nothing and so we can pretty much ignore the potential energy of that bullet sitting at six feet in the air, but now lets look at the Kinetic energy of this bullet when shot. Since this bullet will be twisting when it flies, it will have rotational kinetic energy, but I really don’t want to get into those calculations and from what I have read, the amount of energy given by rotation versus that of the charge behi nd the bullet is really insignificant so I will only calculate the KE as if the bullet is not rotating. The formula is KE=1/2mv^2.

Financial Statement Discussion and Analysis

IPSASB Exposure Draft (ED) 47 March 2012 Comments due: July 31, 2012 Proposed International Public Sector Accounting Standard Financial Statement Discussion and Analysis The International Public Sector Accounting Standards Board (IPSASB) sets International Public Sector Accounting Standards (IPSASs) for use by public sector entities, including national, regional, and local governments, and related governmental agencies. A key part of the IPSASB’s strategy is to converge the IPSASs, to the extent appropriate, with the IFRSs issued by the IASB.The objective of the IPSASB is to serve the public interest by setting high-quality public sector accounting standards and by facilitating the adoption and implementation of these, thereby enhancing the quality and consistency of practice throughout the world and strengthening transparency and accountability of public sector finances. ——————– The structures and processes that support the ope rations of the IPSASB are facilitated by the International Federation of Accountants (IFAC).The mission of the International Federation of Accountants (IFAC) is to serve the public interest by: contributing to the development, adoption and implementation of high-quality international standards and guidance; contributing to the development of strong professional accountancy organizations and accounting firms, and to high-quality practices by professional accountants; promoting the value of professional accountants worldwide; speaking out on public interest issues where the accountancy profession’s expertise is most relevant.International Public Sector Accounting Standards, Exposure Drafts, Consultation Papers, and other IPSASB publications are published by, and copyright of, IFAC. The IPSASB and IFAC do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this publication, whether such loss is caused by neglige nce or otherwise. The IPSASB logo, ‘International Public Sector Accounting Standards Board’, ‘IPSASB’, ‘International Public Sector Accounting Standards’ ‘IPSAS’, the IFAC logo, ‘International Federation of Accountants’, and ‘IFAC’ are trademarks and service marks of IFAC.Copyright  © March 2012 by the International Federation of Accountants (IFAC). All rights reserved. Permission is granted to make copies of this work to achieve maximum exposure and feedback provided that each copy bears the following credit line: â€Å"Copyright  © March 2012 by the International Federation of Accountants (IFAC). All rights reserved. Used with permission of IFAC. Permission is granted to make copies of this work to achieve maximum exposure and feedback. † Published by: REQUEST FOR COMMENTSThis Exposure Draft 47, Financial Statement Discussion and Analysis, was developed and approved by the International Public Sector Accounting Standards Board (IPSASB). The proposals in this Exposure Draft may be modified in light of comments received before being issued in final form. Comments are requested by July 31, 2012. Respondents are asked to submit their comments electronically through the IPSASB website, using the â€Å"Submit a Comment† link. Please submit comments in both a PDF and Word file.Also, please note that first-time users must register to use this feature. All comments will be considered a matter of public record and will ultimately be posted on the website. Although IPSASB prefers that comments are submitted via its website, comments can also be sent to Stephenie Fox, IPSASB Technical Director at [email  protected] org. This publication may be downloaded free of charge from the IPSASB website: www. ipsasb. org. The approved text is published in the English language.Objective of the Exposure Draft The objective of this Exposure Draft (ED) is to propose an authoritative Stand ard for the preparation of financial statement discussion and analysis by public sector entities. Guide for Respondents The IPSASB would welcome comments on all of the matters discussed in this Exposure Draft. Comments are most helpful if they indicate the specific paragraph or group of paragraphs to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording.The Specific Matter for Comments requested for the Exposure Draft are provided below. Specific Matter for Comment 1: Do you agree that the material presented in this Exposure Draft should be developed as an IPSAS, with the same level of authority as the accrual based IPSASs, which applies to all entities that prepare financial statements in accordance with IPSASs? Specific Matter for Comment 2: Do you agree that IPSAS 1 should be amended to clearly indicate that financial statement discussion and analysis is not a component of the financial statements?Specific Matter for Comm ent 3: Is the scope of financial statement discussion and analysis clearly defined so as to distinguish it from other issues being addressed by the IPSASB (e. g. , financial statements, service performance reporting, reporting on the long-term sustainability of public finances)? Specific Matter for Comment 4: Is the required content for financial statement discussion and analysis appropriate? 3 Specific Matter for Comment 5: Do you agree with the transitional provisions?Specific Matter for Comment 6: Is the Implementation Guidance useful to understanding the requirements of the proposed IPSAS? Specific Matter for Comment 7: Is the Illustrative Example a useful way of illustrating the requirements of the proposed IPSAS? 4 IPSAS XX (ED 47)—FINANCIAL STATEMENT DISCUSSION AND ANALYSIS CONTENTS Paragraph Objective †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Scope †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Requirement for Financial Statement Discussion and Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Definition †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Qualitative Characteristics †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Structure and Content of Financial Statement Discussion and Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Identification and Responsibility †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.Compliance with this IPSAS †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Minimum Required Content †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢ € ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Overview of the entity†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Information about the entity’s objectives and strategies †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Analysis of the entity’s financial statements †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.Risks and uncertainties †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Transition†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â ‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Effective Date †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Appendix A: Amendments to Other IPSASs Basis for Conclusions Alternative View Implementation Guidance Illustrative Example 1 2? 5 6–7 8 9 10? 32 11–12 13–14 15? 32 18 19–20 21–26 7–32 33–34 35–36 5 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS International Public Sector Accounting Standard XX (ED 47), Financial Statement Discussion and Analysis is set out in paragraphs 1–36. All the paragraphs have equal authority. IPSAS XX (ED 47) should be read in the context of its object ive, the Basis for Conclusions, and the Preface to International Public Sector Accounting Standards. IPSAS 3, Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance. FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Objective 1. The objective of this Standard is to prescribe the manner in which financial statement discussion and analysis should be prepared and presented. To achieve this objective, this Standard sets out overall considerations for the guidance for its structure, minimum requirements for the content and presentation to allow entities to prepare financial statement discussion and analysis for their specific circumstances to assist users to understand the financial statements. Scope 2.An entity that prepares and presents general purpose financial statements (â€Å"financial statements†) in accordance with IPSAS 1, Presentation of Financial Statements, shall prep are and present financial statement discussion and analysis. Financial statement discussion and analysis shall be prepared for the same reporting entity that prepares and presents financial statements under the accrual basis of accounting. This Standard applies only to financial statement discussion and analysis. It does not apply to other information included in public documents issued in conjunction with the financial statements.This Standard applies to all public sector entities other than Government Business Enterprises. The Preface to International Public Sector Accounting Standards issued by the IPSASB explains that Government Business Enterprises (GBEs) apply IFRSs issued by the IASB. GBEs are defined in IPSAS 1. 3. 4. 5. Requirement for Financial Statement Discussion and Analysis 6. 7. An entity shall issue the financial statement discussion and analysis when it issues financial statements. IPSAS 1 requires financial statements to be prepared at least annually. Some entities may prepare condensed interim financial information.This Standard requires an entity to issue financial discussion and analysis in conjunction with the entity’s annual financial statements. Definition 8. The following term is used in this Standard with the meaning specified: Financial statement discussion and analysis is an explanation of the significant items, transactions, and events presented in an entity’s financial statements and the trends and factors that influenced them. Terms defined in other IPSASs are used in this Standard with the same meaning as in those Standards, and are reproduced in the Glossary of Defined Terms published separately.Qualitative Characteristics 9. Financial statement discussion and analysis shall include information that possesses the qualitative characteristics of general purpose financial reports identified in Appendix A of IPSAS 1. 7 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Structure and Content of Financial Statement Discussion and Analysis 10. Financial statement discussion and analysis shall be consistent with the financial statements, and based on currently-known facts and supportable assumptions.Identification of Financial Statement Discussion and Analysis 11. 12. Financial statement discussion and analysis shall be identified clearly, and distinguished from the financial statements. Separate identification of financial statement discussion and analysis enables users to distinguish: (a) (b) Financial statements prepared and presented under the accrual basis of accounting in accordance with IPSASs; and Other information presented in an annual report or other document that may be useful to users but is not the subject of requirements in IPSASs.Compliance with this IPSAS 13. An entity whose financial statement discussion and analysis complies with this IPSAS shall make an explicit and unreserved statement of such compliance. Financial statement discussion and analysis shall not be described as complying w ith this IPSAS unless it complies with all the requirements of this IPSAS. In some jurisdictions, preparation and presentation of financial statement discussion and analysis is required by legislative, regulatory, or other externally-imposed regulations.Entities are encouraged to disclose information about compliance with those requirements. 14. Minimum Required Content 15. To the extent it does not replicate information in the financial statements, financial statement discussion and analysis shall include, at a minimum: (a) (b) (c) (d) 16. An overview of the entity; Information about the entity’s objectives and strategies; An analysis of the entity’s financial statements, including variances and trends; and Information about the entity’s risks and uncertainties, including its risk management strategy.Financial statement discussion and analysis provides useful information to users for accountability and decision-making purposes. However, some matters may be requ ired to be included in the financial statements by relevant IPSASs that may also be required to be included in financial statement discussion and analysis in accordance with this Standard. In those cases, financial statement discussion and analysis should not merely repeat what is in the financial statements, but it should complement and supplement the financial statement explanations by providing insights and perspectives thereon.Although the specific information contained in an entity’s financial statement discussion and analysis will vary depending on the facts and circumstances specific to the entity, certain essential elements are important to all financial statement discussion and analysis, as discussed below. 17. 8 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Overview of the Entity 18. An overview of the entity helps users to understand the entity and how the environment in which it operates affect an entity’s financial statements. This information is the startin g point in assisting users’ understanding of an entity’s financial statements.Information provided about an entity’s operations in financial statement discussion and analysis may include current information, and changes from the prior year, about: (a) (b) (c) (d) The entity’s mission and vision; The entity’s governance (e. g. , legislative or regulatory structure, management structure); The entity’s relationships with other entities (e. g. , funding arrangements); External trends, events and developments in the legal, regulatory, social, political, and macro-economic environment specific to the entity, which have or may have a material impact on the entity’s financial position and financial performance (e. . , the impact of a regional or international financial crisis on employment, the tax base, or interest rates in the jurisdiction); and The entity’s main operations, including service delivery methods (e. g. , outsourcing, se rvice concession arrangements) and significant changes in them. (e) Information about the Entity’s Objectives and Strategies 19. Financial statement discussion and analysis should discuss the entity’s objectives and strategies in a way that enables users of the financial statements to understand the entity’s priorities and to identify the resources that must be managed to achieve its objectives.Financial statement discussion and analysis should also explain how the achievement of the entity’s financial objectives (e. g. , debt reduction strategy) will be measured. Financial statement discussion and analysis should discuss significant changes in an entity’s objectives and strategies from the previous period or periods. 20. Analysis of the Entity’s Financial Statements 21. Financial statement discussion and analysis should describe the significant events and activities that have affected the financial statements, without simply reiterating the information presented in those financial statements.A brief discussion of the purpose of, and information provided by, each component of the financial statements set out in IPSAS1, and their interrelationships should also be provided. In addition, there should be a discussion of significant commitments, contingencies, and events occurring after the reporting date. If financial performance measures that are not required or defined by IPSASs are included within financial statement discussion and analysis, those measures should be defined and explained, including an explanation of the relevance of the measure to users.When financial performance measures are derived or drawn from the financial statements, those measures should be reconciled to measures presented in the financial statements that have been prepared in accordance with IPSASs. In addition, narrative explanations of such illustrations should be provided if necessary to accurately and completely present the information. Comp arative information should be included in financial statement discussion and analysis when it is relevant to an understanding of the current period’s financial statements. 9 22. 23. FINANCIAL STATEMENT DISCUSSION AND ANALYSIS 4. Financial statements can have a predictive or prospective role. This Standard does not require the entity to disclose forward-looking information, such as forecasts or projections. However, financial statement discussion and analysis should explain significant changes and trends in an entity’s financial position and financial performance. An analysis of trends includes those financial statement items that are important and significant to gaining a better understanding of an entity’s financial position and performance and changes in financial position and performance over a period of time.Identification of the main events, trends, and factors influencing the current reporting period may provide information about the entity’s intend ed actions in relation to such events, trends, and factors because the party responsible for the preparation of the entity’s financial statement discussion and analysis possesses informed expectations regarding the entity’s future operations based on its detailed knowledge of the entity’s current operations.To the extent such information is not included in the financial statements, financial statement discussion and analysis should include information about significant positive and negative variances between: (a) (b) Actual results and the budget; and The prior year and current year financial statements, by explaining significant changes and highlighting trends. 25. 26. Risks and Uncertainties 27. Information about the entity’s risks and uncertainties helps users to evaluate the impact of risks in the current period (e. . , contingent liabilities disclosed in the financial statements) as well as expected outcomes. Information provided may include its main exposures to risk and changes in those risks, its opportunities, along with its policies and strategies for mitigating the risks and capitalizing on opportunities. It may also include the entity’s evaluation of the effectiveness of its risk management strategies.It is noted, however, that these need to be fact-based and take into account currently-known conditions. In addition, underlying assumptions need to be disclosed. Information about the entity’s risks and uncertainties may include a discussion of such matters as a summary of the entity’s investment policy and other means of managing its risks, insurance coverage, and other controls intended to safeguard the entity’s assets.It may also include the relevant legislation, regulation or body that sets the risk management policies for the entity (e. g. , when risks are managed at a government-wide level). A discussion of how the entity’s manages its risks helps users obtain a complete picture of the entity’s exposure to risks that directly affect financial statement items and disclosures, which allows them to evaluate the entity’s financial position and financial performance.Such disclosure may include the entity’s decision to â€Å"self-insure†, or to mitigate risk by transferring or sharing it, or through insurance. Additional information may be provided about uncertainties such as environmental issues, and significant events after the reporting date (see IPSAS 14, Events After the Reporting Date), which may affect the entity’s future operations (e. g. debt issuance, guarantees issued in relation to a financial crisis, or entering into a new service concession arrangement). Information may also be provided about the entity’s opportunities; however in reporting such information, care must be taken to ensure it is fact-based, and neutral. This means that the assumptions made are based on conditions that exist at the reporting date a nd events that occurred in the current period. 10 28. 29. 30. FINANCIAL STATEMENT DISCUSSION AND ANALYSIS 31.A discussion of the risks the entity faces also provides relevant information to users about exposure or vulnerability to concentrations of risks such as significant loans to particular regions or industries, or dependence on a particular source of revenue. Risks and uncertainties may have a pervasive effect on the financial statements, therefore information pertaining to risks and uncertainties may be reported separately, or in relevant sections throughout the financial statement discussion and analysis. 2. Transition 33. 34. All provisions of this Standard shall be applied from the date of first adoption of this Standard. An entity that has applied the transitional provision in IPSAS 1 to present only current period information in the financial statements to which accrual accounting is first adopted in accordance with IPSASs is permitted to omit the comparative information described in paragraph 23 from its financial statement discussion and analysis for that period.Effective Date 35. An entity shall apply this Standard to financial statement discussion and analysis that relates to annual financial statements covering periods beginning on or after MM DD, YYYY. Earlier application is encouraged. If an entity applies this Standard for a period beginning before MM DD, YYYY, it shall disclose that fact and apply IPSAS 1 and IPSAS 24, Presentation of Budget Information in Financial Statements at the same time. When an entity dopts the accrual basis of accounting as defined by IPSASs for financial reporting purposes subsequent to this effective date, this Standard applies to the entity’s financial statement discussion and analysis covering periods beginning on or after the date of adoption. 36. 11 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Appendix A Amendments to Other IPSASs IPSAS 1, Presentation of Financial Statements A new paragraph is inserted after paragraph 21 as follows: Components of Financial Statements 21.A complete set of financial statements comprises: (a) (b) (c) (d) (e) A statement of financial position; A statement of financial performance; A statement of changes in net assets/equity; A cash flow statement; When the entity makes publicly available its approved budget, a comparison of budget and actual amounts either as a separate additional financial statement or as a budget column in the financial statements; and Notes, comprising a summary of significant accounting policies and other explanatory notes. (f) 21A. Financial statement discussion and analysis is not a component of the financial statements.IPSAS XX (ED 47), Financial Statement Discussion and Analysis requires financial statement discussion and analysis to be presented in conjunction with its financial statements. A new paragraph is inserted after paragraph 24 as follows: 24. Public sector entities are typically subject to budgetary limits in the f orm of appropriations or budget authorizations (or equivalent), which may be given effect through authorizing legislation. General purpose financial reporting by public sector entities may provide information on whether resources were obtained and used in accordance with the legally adopted budget.Entities that make publicly available their approved budget(s) are required to comply with the requirements of IPSAS 24, Presentation of Budget Information in Financial Statements. For other entities, where the financial statements and the budget are on the same basis of accounting, this Standard encourages the inclusion in the financial statements of a comparison with the budgeted amounts for the reporting period. Reporting against budget(s) for these entities may be presented in various different ways, including: ?The use of a columnar format for the financial statements, with separate columns for budgeted amounts and actual amounts. A column showing any variances from the budget or appr opriation may also be presented for completeness; and Disclosure that the budgeted amounts have not been exceeded. If any budgeted amounts or appropriations have been exceeded, or expenses incurred without appropriation or other form of authority, then details may be disclosed by way of footnote to the relevant item in the financial statements. ? 12 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS 4A. When an entity elects, under IPSAS 24, to explain, in financial statement discussion and analysis rather than by way of note disclosure, material differences between the budgeted and actual amounts identified in paragraph 24, it applies the guidance in IPSAS XX (ED 47). Paragraphs 27 and 28 are amended as follows: Overall Considerations Fair Presentation and Compliance with IPSASs 27. Financial statements shall present fairly the financial position, financial performance, and cash flows of an entity. Fair presentation of the financial statements requires the aithful representation of the ef fects of transactions, other events, and conditions in accordance with the definitions and recognition criteria for assets, liabilities, revenue, and expenses set out in IPSASs applicable to the financial statements. The application of these IPSASs, with additional disclosures when necessary, is presumed to result in financial statements that achieve a fair presentation. An entity whose financial statements comply with IPSASs applicable to the financial statements shall make an explicit and unreserved statement of such compliance in the notes.Financial statements shall not be described as complying with IPSASs unless they comply with all the requirements of those IPSASs. 28. Paragraph 62 is amended as follows: Identification of the Financial Statements †¦ 62. IPSASs apply to financial statements and financial statement discussion and analysis, and not to other information presented in an annual report or other document. Therefore, it is important that users can distinguish info rmation that is prepared using IPSASs from other information that may be useful to users but is not the subject of those requirements.A new paragraph is inserted after paragraph 153D as follows: Effective Date 153E. Paragraphs 21A and 24A were inserted and paragraphs 27, 28 and 62 were amended by IPSAS XX (ED 47) issued in Month 201X. An entity shall apply those amendments for annual financial statements covering periods beginning on or after Month DD, 201X. Earlier application is encouraged. If an entity applies the amendments for a period beginning before Month DD, 201X, it shall disclose that fact and at the same time apply IPSAS XX (ED 47) and the amendments to paragraphs 14, 19 and 54A of IPSAS 24. 3 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS IPSAS 24 Presentation of Budget Information in Financial Statements Paragraph 14 is amended as follows: Presentation of a Comparison of Budget and Actual Amounts 14. Subject to the requirements of paragraph 21, an entity shall present a c omparison of the budget amounts for which it is held publicly accountable and actual amounts, either as a separate additional financial statement or as additional budget columns in the financial statements currently presented in accordance with IPSASs.The comparison of budget and actual amounts shall present separately for each level of legislative oversight: (a) (b) (c) The original and final budget amounts; The actual amounts on a comparable basis; and By way of note disclosure, an explanation of material differences between the budget for which the entity is held publicly accountable and actual amounts, unless such explanation is included in either the financial statement discussion and analysis or other public documents issued in conjunction with the financial statements, and a cross reference to those documents is made in the notes.Paragraph 19 is amended as follows: 19. Management IPSAS XX (ED 47), Financial Statement Discussion and Analysis requires presentation of a financia l statement discussion and analysis, operations review, or other public reports that provides commentary on the performance and achievements of the entity during the reporting period,. It can include including explanations of any material differences from budget amounts,. Alternatively, this explanation could be included in other public documents are often issued in conjunction with the financial statements.In accordance with paragraph 14(c) of this Standard, explanation of material differences between actual and budget amounts will be included in notes to the financial statements, unless (a) included in the financial statement discussion and analysis or other public reports or documents issued in conjunction with the financial statements, and (b) the notes to the financial statements identify the reports or documents in which the explanation can be found. When an entity presents the actual-to-budget comparison in financial statement discussion and analysis, it applies the guidance in IPSAS XX (ED 47).A new paragraph is inserted after paragraph 54 as follows: Effective Date 54A. Paragraphs 14 and 19 were amended by IPSAS XX (ED 47) issued in Month 201X. An entity shall apply those amendments for annual financial statements covering periods beginning on or after Month DD, 201X. Earlier application is encouraged. If an entity applies the amendments for a period beginning before Month DD, 201X, it shall disclose that fact and at the same time apply IPSAS XX (ED 47) and the amendments to paragraphs 21A, 24A, 27, 28, 62 and 153E of IPSAS 1. 14 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Basis for ConclusionsThis Basis for Conclusions accompanies, but is not part of, IPSAS XX (ED 47). Scope and Authority BC1. The IPSASB approved a project in March 2008 to address â€Å"narrative reporting†. In developing this Standard, the IPSASB clarified that the scope of the project is to address only those reports that provide discussion and analysis specifically pertaini ng to an entity’s general purpose financial statements (â€Å"financial statements†) as set out in IPSAS 1, and not broader types of reports that may be considered general purpose financial reports as envisaged in the IPSASB’s Conceptual Framework.BC2. In undertaking this project, the IPSASB considered, under its Criteria for Modifying IASB Documents, whether to develop guidance that was converged with Management Commentary, an IFRS Practice Statement. The IPSASB did not consider this approach to be appropriate because: (a) The users identified in the Practice Statement are investors. IPSAS 1, Presentation of Financial Statements, identifies different users, which results in different information needs related to the financial statements.Additionally, in the private sector there may be a strong influence from the securities exchanges and their regulators which help ensure and reinforce the information needs of the investors. In the public sector there may not be a comparable regulator, which participates in the process of standardizing financial statement discussion and analysis for a jurisdiction, and therefore reliance on the private sector guidance may result in loss of accountability in the public sector. (b) BC3.Financial statement discussion and analysis is intended to address similar matters to reports that may be termed â€Å"management discussion and analysis† and â€Å"management commentary† in various jurisdictions. However, the IPSASB did not consider those terms to accurately describe the nature of the report in relation to the financial statements. The IPSASB decided it was important to link financial statement discussion and analysis to the financial statements because the financial statement discussion and analysis is intended to explain the financial statements, and not to stand alone.The IPSASB considers the term â€Å"financial statement discussion and analysis† clearly defines the scope of applicabi lity of this Standard and its close linkage to the financial statements. BC4. The IPSASB considered whether public sector entities that prepare and present financial statements in accordance with International Public Sector Accounting Standards (IPSAS): (a) (b) Should be required to prepare financial statement discussion and analysis; and If so, whether financial statement discussion and analysis should be included as an integral part of the general purpose financial statements.BC5. The IPSASB considers that financial statement discussion and analysis provides additional information necessary to meet the objectives of financial statements. The IPSASB concluded that all entities that prepare and present their financial statements in accordance with IPSASs should be required to prepare financial statement discussion and analysis in accordance with this IPSAS, which has the same level of authority as accrual based IPSASs. 15 FINANCIAL STATEMENT DISCUSSION AND ANALYSISBC6. The IPSASB de cided it was important to develop a standard that provided principles for financial statement discussion and analysis, while allowing reporting on specific information most relevant to an entity. Accordingly, this Standard has been developed from a principlesbased perspective that can be applied to all public sector entities. In addition, entities are encouraged to prepare financial statement discussion and analysis that meets their specific circumstances.The IPSASB considered whether a requirement to issue financial statement discussion and analysis when an entity issues financial statements prepared in accordance with IPSASs would be an impediment to the adoption of IPSASs. The IPSASB considered that the users of financial statements in such jurisdictions may even have a greater need for the benefit of financial statement discussion and analysis to help explain the financial statements.The IPSASB considers that in all cases, the benefits of providing financial statement discussion and analysis would outweigh the costs of preparing it, as the information is used in the preparation of the financial statements, and tailored to the specific circumstances of the entity. The IPSASB therefore concluded that financial statement discussion and analysis should be prepared by all entities that prepare their financial statements in accordance with IPSASs. IPSAS 1 defines the scope of the financial statements.The IPSASB does not consider financial statement discussion and analysis to be part of the financial statements prepared in accordance with IPSASs despite its close link to the financial statements. The IPSASB did not, therefore, amend IPSAS 1 to include financial statement discussion and analysis as an integral part of the financial statements. Nevertheless, the IPSASB has clarified the close link between the financial statements and financial statement discussion and analysis. BC7. BC8. BC9. BC10.The IPSASB noted the concern that, if this Standard were an IPSAS, i t could still be considered part of the financial statements and there could be confusion as to whether it would be subject to the same audit requirements as the financial statements. This could cause difficulties in some jurisdictions if the inclusion of financial statement discussion and analysis resulted in a qualified audit report on the financial statements. While the audit of financial statement discussion and analysis is desirable, the IPSASB considers that imposing an audit requirement on such information exceeds its mandate.However, it is noted that an audit of financial statements would not automatically require audited financial statement discussion and analysis. The term â€Å"financial statements† ordinarily refers to a complete set of financial statements as determined by the requirements of the applicable financial reporting framework. The financial reporting framework for public sector entities is described in IPSAS 1, and does not include financial statement discussion and analysis. BC11.To date, IPSASs have addressed only matters that pertain to the content of the financial statements themselves. The IPSASB considered whether it would be appropriate to allow for a new type of pronouncement that had equivalent authoritative status to the IPSASs. The IPSASB is of the view that introducing a new type of pronouncement would be confusing to its constituents. Accordingly, the IPSASB has decided that an International Public Sector Accounting Standard (IPSAS) is the appropriate type of pronouncement to apply to the financial statement discussion and analysis. 6 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Qualitative Characteristics BC12. The IPSASB also concluded that the information in financial statement discussion and analysis should possess the qualitative characteristics and constraints in IPSAS 1. Accordingly, IPSAS XX (ED 47) contains requirements that financial statement discussion and analysis contain information that is consistent wi th those qualitative characteristics. Structure and Content of Financial Statement Discussion and Analysis BC13.Paragraph 21 of IPSAS 1 states that a complete set of financial statements comprises: (a) (b) (c) (d) (e) A statement of financial position; A statement of financial performance; A statement of changes in net assets/equity; A cash flow statement; When the entity makes publicly available its approved budget, a comparison of budget and actual amounts either as a separate additional financial statement or as a budget column in the financial statements; and Notes, comprising a summary of significant accounting policies and other explanatory notes.The IPSASB noted that in some of the minimum required content in paragraph 15 of IPSAS XX (ED 47) may also be required under other IPSASs for financial statements. IPSAS XX (ED 47) therefore requires financial statement discussion and analysis include significant items, transactions, and events that are presented in an entity’s financial statements to the extent it does not replicate information in the financial statements. BC14.The IPSASB noted that the content and format of presentation of financial statement discussion and analysis should be determined by the entity, in a way that best reflects its circumstances, noting that the specific information contained in an entity’s financial statement discussion and analysis will vary depending on the facts and circumstances specific to the entity. The IPSASB wishes to avoid a checklist approach that may result in an entity reporting less relevant information. Accordingly, some flexibility is provided in the content and format.However, the Standard contains certain essential required content that is important to all financial statement discussion and analysis. BC15. In determining the matters that should be required in financial statement discussion and analysis, the IPSASB reviewed and compared existing national standards, guidance, and regulatory requ irements for financial statement discussion and analysis (or its equivalent) in the public sector. The existing approaches, identified in conducting the research, were used to help form the basis for the required content of financial statement discussion and analysis.BC16. In some cases an IPSAS permits certain information to be included in separate reports (e. g. , financial statement discussion and analysis) rather than in the financial statements. The IPSASB did not consider it necessary to duplicate the financial statement disclosure in the financial statement discussion and analysis and has accordingly provided guidance to that effect. (f) 17 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Forward-Looking Information BC17. This Standard does not require the entity to disclose forward-looking information, such as forecasts or projections.However, the IPSASB noted that information in financial statements also has predictive ability about the entity’s operations, and that finan cial statement discussion and analysis could enhance that ability. For example, information about an entity’s risk management policies, and trend analyses of significant financial statement items, may assist users in assessing the extent to which resources will be available to support future service delivery objectives and the amounts and timing of future cash flows necessary to service and repay existing claims to the entity’s resources.The IPSASB has thus provided guidance on how such information could be included in financial statement discussion and analysis. Transitional Provisions BC18. The IPSASB determined that a transitional provision was required to address the case when an entity has used the exemption under IPSAS 1 to not include comparative information in respect of the financial statements to which accrual accounting is first adopted in accordance with IPSASs.This Standard states that comparative information should be included in financial statement discu ssion and analysis when it is relevant to an understanding of the current period’s financial statements. However, where an entity has applied the transitional provision in IPSAS 1 it is unlikely to have comparative information and thus it would not be possible to provide such comparative information. 18 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Alternative View of Mr. Thomas Muller-Marques Berger AV1. This member is of the view that ED 47 should require entities to disclose forward-looking information, such as forecasts or projections.As outlined in the IPSASB’s Conceptual Framework Exposure Draft 1, the objectives of financial reporting by public sector entities are to provide information about the entity that is useful to users of GPFRs for accountability purposes and for decision-making purposes. AV2. In the view of this member, the decision not to require entities to disclose forward-looking information does not completely fulfill user needs as the objective of d ecision-making is not sufficiently addressed. 19 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Implementation GuidanceThis guidance accompanies, but is not part of, IPSAS XX (ED 47). IG1. The purpose of this Implementation Guidance is to illustrate certain aspects of the requirements of IPSAS XX (ED 47). IG2. This Implementation Guidance is divided into three sections as follows: (a) (b) (c) Section A: Qualitative Characteristics of General Purpose Financial Reports— Applicability to Financial Statement Discussion and Analysis; Section B: Examples of Information about the Entity’s Financial Statements; and Section C: Examples of Information about Variances and Trends.Section A: Qualitative Characteristics of General Purpose Financial Reports— Applicability to Financial Statement Discussion and Analysis A. IG1. Financial statement discussion and analysis is intended to explain the significant items, transactions, and events presented in an entity’s financial statements and the trends and factors that influenced the financial statements to assist users to understand the financial statements. It should, therefore, possess the same qualitative characteristics as for financial statements described in IPSAS 1, namely: (a) (b) (c) (d) Understandability; Relevance; Reliability; and Comparability.A. IG2. Financial statement discussion and analysis should aim to achieve a balance between the qualitative characteristics to meet the objectives of providing the information. In some cases, depending on the circumstances of the entity, the relative importance of a particular qualitative characteristic may be greater than in others. A. IG3. Application of the qualitative characteristics to financial statement discussion and analysis is set out in paragraphs A. IG. 4? A. IG. 20. Understandability A. IG4.Information provided in financial statement discussion and analysis should be clear and concise to explain and interpret the complex transactions, eve nts, and conditions presented in the financial statements in a readable and simple manner. Financial statement discussion and analysis is understandable when it uses descriptions that are not overly technical, does not provide excessive detail, and clearly describes those transactions, events, and conditions. Relevance A. IG5. The matters that are relevant to an entity are also specific to that entity.Financial statement discussion and analysis reflects detailed knowledge of the items, transactions, and events, presented in the entity’s financial statements and of the policies that govern the entity’s 20 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS operations. This means that financial statement discussion and analysis may not include some matters that are material to the components of the financial statements set out in IPSAS 1, or it may include some matters that are not material to the financial statements. A. IG6.Financial statement discussion and analysis needs to be clear and concise to be useful, therefore the most important, or material, matters must be selected to be included, descriptions should be non-technical, and an appropriate but not excessive level of detail should be provided. Inclusion of information about immaterial items could make the more important information difficult to find. A. IG7. Generic or â€Å"boilerplate† information that does not relate to the specific operations, practices and circumstances of the entity is unlikely to be relevant and should not be included in financial statement discussion and analysis.When practicable, duplication of the disclosures made in the notes to its financial statements should be avoided. Financial statement discussion and analysis that recites financial statement information without analysis or explanations, or presents discussions that do not provide insight into the entity’s past performance is unlikely to provide information that is relevant to users of the financial statements, and may create an obstacle for users to identify and understand the most significant matters the entity faces.For example, commentary on the economy that relates specifically to the entity’s financial statements and expected impacts on the entity would be relevant information for users. A. IG8. When dealing with qualitative or forward-looking information (e. g. , expectations about financial results in the future), it is not generally possible to specify a uniform quantitative threshold above which a particular type of information becomes material. A. IG9. Financial statement discussion and analysis provides additional perspectives and insights about the financial statements, which increases the relevance of the information. Reliability A. IG10.Information presented in financial statement discussion and analysis should be: (a) (b) (c) (d) Based on, and consistent with, the underlying financial statements; Neutral in discussing both positive and negative facts and views; Based on currently-known facts, decisions, or conditions; and Based on verifiable and supportable assumptions. A. IG11. It is important that information presented in the financial statement discussion and analysis is supported by information in the financial statements, and does not go beyond or contradict the information presented in the financial statements. A. IG12. Information that excludes certain facts (e. . , negative) is incomplete and thus could be not neutral. In cases when financial statement discussion and analysis presents ratios, tables, or charts, they should not distort the information in the financial statements by, for example, using a scale that exaggerates a positive or negative trend. A. IG13. Financial statement discussion and analysis should contain information specific to the entity and related to that reporting period. While the information provided in financial statement discussion and analysis may reflect information outside of the financial stateme nts (e. g. , 21 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS conomic indicators such as changes in the tax base or the employment base), that information should be related to the reporting period and should be from a reliable source. A. IG14. The underlying assumptions and methodologies (including formulae) used to determine ratios and to prepare tables and charts included in financial statement discussion and analysis should be disclosed (e. g. , those used in analyses of trends and variances). In addition, the methodologies adopted in compiling the information, and the factors and circumstances that support the discussion and analyses, need to be transparent.Disclosure of this information permits users to assess the reliability of the information provided. A. IG15. Assumptions should be mutually compatible. Assumptions are mutually compatible when they reflect economic relationships in the jurisdiction (e. g. , interest rates, employment rates, GDP). For example, all assumptions th at depend on the tax base for a given future period would assume the same tax base level in that period. A. IG16. Financial statement discussion and analysis should clearly describe the basis for how the information is reported, including the unit of measurement.For example, in cases when financial statement discussion and analysis presents ratios, tables, or charts, they should not distort the information in the financial statements by, for example, using a scale that exaggerates a positive or negative trend. Thus, when financial statement discussion and analysis contains charts or graphs showing trends, disclosure of the unit of measurement is necessary to ensure such information can be properly interpreted. When such information is presented, the scale of such illustrations should be on a basis that faithfully represents the relationships of the items being analyzed.A. IG17. In some cases it may not be possible to verify the accuracy of all qualitative and quantitative explanatio ns of such information until a future period, if at all. For example, if the entity’s strategy and risk management are described in financial statement discussion and analysis, such information would be less verifiable than, for example, a ratio calculated from information provided in the financial statements. Comparability A. IG18. Information in financial statement discussion and analysis should be comparable. Comparability pplies to information related to different entities and to the entity over periods of time. A. IG19. Comparability is enhanced when financial statement discussion and analysis is presented on a basis consistent with that in prior years and when the same principles and practices are used for each period for such items as determining ratios and preparation of tables and charts included in financial statement discussion and analysis. In addition, disclosure of those principles and practices, including underlying assumptions and formulae, is useful in interp reting the analyses.Changes to the principles and practices used to prepare financial statement discussion and analysis from one period to the next should be disclosed. A. IG20. Enhancing the inter-period comparability of information assists users in making and evaluating decisions, especially by allowing the assessment of trends in financial information for predictive purposes. In some circumstances, it is impracticable to reclassify comparative information for a particular prior period to achieve comparability with the current period.For example, data may not have been collected in the prior period(s) in a way that allows reclassification, and it may not be practicable to recreate the information. 22 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Section B: Examples of Information about the Entity’s Financial Statements This Implementation Guidance includes guidance on how an entity may prepare and present financial statement discussion and analysis that includes information a bout all significant items, transactions, and events presented in the financial statements that are most relevant to enhancing users’ understanding of the financial statements. Financial Position B.IG1. Information about the financial position will help users to identify the resources of the entity that can be used to provide particular services in future periods and claims to those resources at the reporting date. This will provide information useful as input to assessments of such matters as: ? ? ? The extent to which the entity has discharged its responsibilities for safekeeping and managing its resources; The extent to which resources are available to support future service delivery objectives; and The amounts and timing of future cash flows necessary to service and repay existing claims to the entity’s resources.Financial Assets B. IG2. Financial statement discussion and analysis may include the following information pertaining to an entity’s financial asse ts: (a) (b) (c) (d) (e) (f) (g) Changes in financial assets to illustrate volatility in the sources of funds; Provisions for loan losses; The rates of return on investment; Composition of investments; A government's investment in GBEs as a percentage of the total financial assets; Taxes receivable to total tax revenues; and Restricted and designated assets set aside for specific purposes. Property, Plant, and Equipment B.IG3. Financial statement discussion and analysis may include the following information pertaining to an entity’s property, plant, and equipment: (a) An analysis of required maintenance, including future expenditure requirements for maintenance and replacement, to allow users to make informed decisions regarding the ability of the capital assets to sustain and provide services in the future; An analysis of the change in the net book value of property, plant, and equipment by major class and an explanation of what the net book value and changes in it mean (e. g . a description of why the net book value has increased or decreased is useful in understanding asset replacement and usage); (b) 23 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS (c) (d) The average age and average useful life for each category of property, plant, and equipment; and An assessment of the assets’ physical condition carried out by a technical expert in such assessments. B. IG4. Asset management systems may contain information about an asset's physical condition, but the absence of an asset management system does not necessarily preclude reporting on the physical condition.B. IG5. Asset condition assessment methodologies and frequency of assessments can be different for major classes of property, plant, and equipment. For example, they could be different for bridges when compared to buildings. B. IG6. It may not be possible to complete a physical examination of all items of property, plant, and equipment. However, the physical condition could be estimated based on a combination of factors including, for example, age, construction materials and methods, breaks per kilometer, geological, and soil conditions.B. IG7. Financial statement discussion and analysis may provide the average age and either the average remaining useful life or estimated average useful life of property, plant, and equipment in each major class. Information about the average age and the useful life allows users to assess the timing of rehabilitation and replacement expenditures. B. IG8. Financial statement discussion and analysis may contain a description and the quantity of the major components of property, plant, and equipment in each major class of asset.Providing this information gives users an understanding of the nature and extent of the stock of property, plant, and equipment. B. IG9. The quantity could be based on a unit of measurement that represents the common characteristics of the class of property, plant, and equipment being assessed or components thereof (e. g . , lanes or kilometers for roads, kilometers of pipes for sewer for water systems, or the number of water treatment plants). This summary level unit of measure provides users with a reference that is useful in assessing the magnitude of the classes and components of items of property, plant, and equipment.B. IG10. The information required to promote a better understanding of an entity’s property, plant, and equipment explains information in the financial statements. Reporting on the physical condition of property, plant, and equipment assists users when assessing: (a) (b) (c) (d) The effects on service potential of past resource allocation and funding decisions; The trends in the physical condition; The adequacy of existing maintenance, replacement and renewal funding; and The extent of current and future revenues needed to maintain, renew, and replace property, plant, and equipment.Other Assets B. IG11. Financial statement discussion and analysis may include the following i nformation pertaining to an entity’s other assets, to the extent they are material (e. g. , inventories of supplies—see IPSAS 12, Inventories, and prepaid expenses): 24 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS (a) (b) Liabilities The nature, extent and purpose of inventories of supplies (e. g. , maintenance materials, strategic stockpiles, and land/property held for resale); and The nature, extent, purpose, and timing of any prepaid items such as insurance. B. IG12.Financial statement discussion and analysis may include the following information pertaining to an entity’s liabilities: (a) (b) A breakdown of the entity's debt by domestic issues versus foreign issues. A description of the entity's debt management policies and strategies, and the general terms and conditions associated with the debt, including whether the entity has complied with any debt covenants. An analysis of the entity's total debt. Specific ratios or indicators may also be useful to highli ght the magnitude of the entity’s debt and the changes in it over time.For example, an analysis of the total debt outstanding at year end to the total liabilities of the entity may be provided. The impact of the debt servicing cost, expressed as public debt charges to revenues, may also be included. An assessment of any unfunded retirement and other employment or post employment benefit liabilities. This may include a discussion related to the timing of when the unfunded liability needs to be provided for. An analysis of revenues that are not earned at the end of the period including the terms and conditions (e. g. , commitments) associated with them.The entity is not entitled to these revenues until it performs specific actions as outlined in the terms and conditions of the related contract or agreement. For example, in the case of service concession arrangements in which the operator is compensated by the entity granting it the right to earn third-party revenues, there may be substantial liabilities of this type. The nature of financial liabilities under service concession arrangements. An analysis of any sinking funds available for the discharge of long-term liabilities. (c) (d) (e) (f) Net Assets/Equity B.IG13. An analysis of net assets/equity provides users with information relevant in assessing the entity's overall financial position, and whether it has improved or deteriorated. Providing significant explanations and a trend analysis related to the net assets/equity provides users with an indication as to whether the entity’s liabilities are growing and allows them to make assessments about whether current levels of taxes or other charges are sufficient to maintain the volume and quality of services currently provided or to undertake any planned enhancements.For example, explanations and a trend analysis related to the assets/equity may indicate to users that while debt is growing, the entity is accumulating resources, such as property, pla nt, and equipment. Financial Performance B. IG14. Information about the financial performance will inform assessments of matters such as whether the entity has acquired resources economically, and used them efficiently and effectively to achieve its service delivery objectives. Information about the costs of service 25FINANCIAL STATEMENT DISCUSSION AND ANALYSIS delivery and the amounts and sources of cost recovery during the reporting period will enable users to determine whether operating costs were recovered from, for example, taxes, user charges, contributions and transfers or were financed by increasing the level of indebtedness of the entity. B. IG15. Any currently-known conditions that have significantly affected revenues or expenses in the current period, as well as those that may impact future evenues or expenses, should be disclosed to assist users in determining trends. Revenues B. IG16. Financial statement discussion and analysis may include the following information pert aining to an entity’s revenues: (a) (b) An overview of total revenues by major source to indicate trends and dependencies on specific sources. Ratios may also be provided to highlight the level of dependence the entity has on particular sources of revenues, for example: (i) (ii) (c) Public-to-public transfers to revenues generated by the entity (e. g. taxes, user fees, licences); and Revenues generated by the entity as a percentage of total revenues. The impact of the of government business