Reference no: EM132715341
Bob has received a call from the owner of the chunk of land next to MFUL, with a request for the company to make a financial commitment or else the land be offered to other buyers. This has led to some panic, with Bob not ready to miss this golden chance to expand MFUL within its present geographical location, yet there are no ready funds to be used for this transaction. A call to the Head of Credit at UFB has indicated that the loan could be processed within a couple of days if all the supporting documents were submitted immediately. The Head of Credit also reminded Bob that the annual report was the most critical document, as it would enable the bank to make a holistic assessment of MFUL's operations for the past few years and the company's potential to service the required loan.
Bob has now engaged Top-man for not only the compilation of the annual report for the year ended 30 June, 2018 but also to audit the financial statements for MFUL for the same period. Top-man will also guide MFUL in appreciating the ramifications of the recent fiscal reforms.
Required:
Section A: Annual report and financial statements
Draft the annual report and financial statements for Modern Farmland Uganda Limited (MFUL) for the year ended June 30, 2018.
You may assume that the audit field work has been completed and the working papers satisfactorily reviewed with no material adjustments required, except for some of the equipment (tractor & delivery truck) which management of the farm has failed to present for physical verification/ inspection. You have also noted that a downward prior year adjustment of Shs 9,045 million should be effected in 2018 to correct the overstated prior year earnings. Your team has completed the financial statements for the year ended June 30, 2017 (see Appendix 3).
Section B: Presentation to the management of MFUL
Prepare presentation to the management of MFUL on the following matters:
B1: Relevance of financial reporting with focus on the conceptual framework for financial reporting.
B2: Likely impact of the adoption of IFRS 9 on MFUL's operations.
B3: Appropriate corporate governance systems and business continuity arrangements necessary for a family-owned business like FMUL.
B4: Ramifications of the fiscal reforms on the operations of MFUL.
B5: Possible measures to be adopted by the authorities to improve tax collection.
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