Instructions:

1) Word limit

The assignment should not exceed 3,000 words in length (excessive length could be

penalised). You should attach to your assignment a copy of the annual report to which your

assignment refers. You may also include appendices containing tables or illustrative material

(e.g. extracts from financial statements), which will not be part of the 3,000 words.

2) Format

Times New Roman font, font size 11 and single spacing.

Required:

Select an annual report of a parent company. The report that you select should have the

following characteristics:

- The annual report should correspond to the last available year.

- It should be written in English.

1) Provide a complete explanation of the consolidated financial accounts relating them

with the elements covered in class.

a) Do the financial reports present goodwill and/or minority interests? Define goodwill and

minority interests. Describe in detail how the company describes these items.

b) Which is the percentage of ordinary shares that the parent company owns from their

subsidiary companies?

c) Does this company have any leasing contract? If so, is it a financial or operating leasing?

Define financial and operating leasing. In case the company does not have a leasing

contract, would you recommend the company to engage in a leasing agreement? Why?

d) Does this company also have associate companies? Which is the percentage of ordinary

shares that the parent company owns from their associate companies? Define the type

of ownership that the parent company has with the associates.

2) Provide a detailed description of the business model and the cost structure of the firm

(sources might include, but are not limited to, financial statements, business press,

and analyst reports). Relate this information to some of the managerial accounting

concepts covered at class.