Arab Open University B291

Get your original paper written from scratch starting at just $10 per page with a plagiarism report and free revisions included!









Hire A Writer


Arab Open University

B291: TMA – 1st Semester 2013-2014

Cut-Off Date: 8th of December 2013

About TMA:

The TMA covers the financial accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students’ understanding of some of the learning points within Units 1 to 4. This TMA requires you to apply the course concepts.

The TMA is intended to:

ØIncrease the students’ knowledge about the reality of the accounting as a profession.

ØAssess students’ understanding of key learning points within Units 1 to 4.

ØDevelop the ability to understand and interact with the nature of the financial statements in reality.

ØDevelop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.

ØDevelop basic ICT skills such as using the internet.

The TMA:

The TMA requires you to:

1- Review various study Units (from 1 to 4) of ‘Financial Accounting’ within it.

2- Conduct a simple information search using the internet.

3- Present your findings in not more than 1,600 words. The word count excludes headings, references, title page, and diagrams.

4- You should use a Microsoft Office Word and Times New Roman Font of 14 points.

5- You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.

Criteria for Grade Distribution:



Using E-library & Referencing

Structure and Presentation of ideas

Total marks

Financial Reporting on the Internet: Sports Direct plc






The TMA Questions

Financial Reporting on the Internet

(Case study: Sports Direct plc)

The internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study.

Sports Direct is the UK’s leading sports retailer by revenue and operating profit, and the owner of a significant number of world-famous sport, fashion and lifestyle brands. Sports Direct provides a full multi-channel approach to the UK and European Retail markets. Its strategy includes identifying opportunities for improvement through in-store specialist collaborations and acquisitions, developing online opportunities and leveraging the fascia. The Group continues to enhance its store portfolio and now operates out of over 500 stores in the UK and internationally.

Access the Sports Direct home web page at:”> From Sports Direct’s home page and then “INVESTOR RELATIONS”, click on “ANNUAL REPORTS AND PRESENTATIONS”, followed by the year 2013 to display and download the “Annual Report”: April 28, 2013 on Form PDF.

Note: the annual report of Sports Direct plc is available at:”>

InstructionsUse the annual report of 2012/2013 to answer the following questions:

1- Explain how International Financial Reporting Standards (IFRS) add to the integrity of Sports Direct’s financial accounting information. Support your answer with evidence from the annual report (Hint: some research is required here.)

[Marks (Words): 10(150)]

2- As mentioned in p. 51,Directors’ responsibilities:

“The Directors have elected to prepare the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practices (UK GAAP).”

Required: State the major sources of these practices. Support your answer with evidence from the annual report (Hint: some research is required here.)

[Marks (Words): 10(150)]

3- As mentioned in p. 66, Notes to the Financial Statements:

“The critical accounting estimates and judgements made by the Group regarding the future or other key sources of estimation, uncertainty and judgement that may have a significant risk of giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial year”


a- Identify four items found in Sports Direct’s annual report that are based on estimates and judgments.

b- Discuss the expected impact on the usefulness of the Company’s financial statement of such estimates and judgments. Explain briefly why you think that the calculation of depreciation is based on estimates rather than actual information, relating your answer to Sports Direct’ fixed assets.

[Marks (Words): 16(150)]

4- Sports Direct mentioned in its annual report, pp. 62-63 that:

“Property, plant and equipment are stated at historical cost less depreciation less any recognised impairment losses. Cost includes expenditure that is directly attributable to the acquisition or construction of these items. Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the costs can be measured reliably.

All other costs, including repairs and maintenance costs, are charged to the income statement in the period in which they are incurred.

Depreciation is provided on all property, plant and equipment other than freehold land and is calculated on a reducing balance basis or straight-line basis, whichever is deemed by the Directors to be more appropriate, to allocate cost less assessed residual value, other than assets in the course of construction, over the estimated useful lives, as follows:

Freehold buildings

2% per annum – straight line

Long-term/short-term leasehold improvments

over the terms of the lease – straight line

Plant and equipment

between 5% and 33% per annum – reducing balance

The assets’ useful lives and residual values are reviewed and, if appropriate, adjusted at each balance sheet date.

The gain or loss arising on disposal or scrapping of an asset is determined as the difference between the sales proceeds, net of selling costs, and the carrying amount of the asset and is recognised in the income statement.”


Write a memo, of no more than 400 words, stating (Hint: support your memo by suitable figures from the Sports Direct’s annual report.)

a- The estimated useful life of thefreehold buildings being depreciated.

b- How the useful life of assets is determined.

c- Sports Direct used different methods to depreciate its assets. State what is meant by the consistency principle and explain how the Company’s depreciation policy complies with that principle.

d- Explain why Sports Direct uses of accelerated depreciation method for plant and equipment and uses of the straight-line method for most of its other assets?

e- Identify the basic “accountable events” in the lives of property, plant and equipment. For each event explain how they affect Sports Direct’s consolidated net income and or consolidated cash flows (other than income tax payments) for the year ended April 28, 2013.

f- Referring to the definition of assets in Units 1 and 3. Discuss how leases of property, plant and equipment might qualify as assets of the lessee, Sports Direct under this definition.

[Marks (Words): 4 marks for each point (500)]

5- Sports Direct’s consolidated income statement reports amortization expense. State the types of assets that would require amortization. State the method of amortization that is generally used by the company. Support your answer by suitable figures from the Sports Direct’ 2013 annual report.

[Marks (Words): 10(150)]

6- State the circumstances under which Sports Direct will record goodwill in their accounts. Give 2 examples of internally created intangibles. Explain why Sports Direct makes a distinction between internally created intangibles and other intangibles.

[Marks (Words): 10(200)]

7- The Sports Direct’s annual report includes gains and losses on disposal of assets. Report the amount(s) of gains and losses on disposal and explain where in Sports Direct’s consolidated income statement they are reported. Describe how gain or losses on disposals are reported in Sports Direct’s statement of cash flows. Summarize the discussion in the Sports Direct’s footnotes concerning the cause of disposals. Support your answer by suitable figures from the Sports Direct’ 2013 annual report.

[Marks (Words): 10(150)]

8- Identify the revenue recognition method(s) used by Sports Direct as discussed in its notes on accounting policies. Explain the rationale underlying the appropriateness methods for Sports Direct.

[Marks (Words): 10(150)]

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

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


The PT3 form (available on LMS)


Title and contents page


Financial Reporting on the Internet (Case study:Sports DirectPlc)


Recorded according to the Harvard style – Available on LMS

Good Luck!

Dr. Helal Afify

Stay Anonymous
With Our Essay Writing Service

The aim of our service is to provide you with top-class essay help when you ask us to write my paper; we do not collect or share any of your personal data. We use the email you provide us to send you drafts, final papers, and the occasional promotion and discount code, but that’s it!

Order Now