Identify the alternative performance measures presented

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Reference no: EM131186673

Case- Venus Cellular

Venus Cellular Limited ("Venus") is the leading, worldwide provider of a wide variety of telecommunications equipment and services. Its telecommunications equipment and services enable its customers to send or receive virtually any type of voice or data transmission. Its customers include fixed line and wireless telecommunication operators, Internet service providers, governments, and businesses. Venus prepares its financial statements in accordance with International Financial Reporting Standards (IFRSs).

 

Consolidated Statement of Comprehensive Income

 

20X1

20X0

 

(US$ millions except per share data)

Revenues

16,419

15,305

Cost of sales

(10,629)

(9,539)

Gross profit

5,790

5,766

Administrative and selling expenses

(2,500)

(2,430)

Research and development costs

(1,804)

(1,863)

Operating income - current

1,486

1,473

Share-based payments (stock option plans)

(86)

(75)

Restructuring costs

(138)

(405)

Impairment of capitalized development

-

(130)

Gain on one time contractual settlement

161

-

Operating income

1,423

863

Interest expense

(273)

(283)

Interest income

153

131

Finance costs

(120)

(152)

Income from sale of assets

1,858

244

Income before tax and associates

3,161

955

Income tax expense

(114)

(45)

Share in net income (losses) of associates

(18)

(76)

Profit or loss

3,029

834

Dividends

(265)

(247)

Retained profit or loss

2,764

587

Other comprehensive income:



Cash flow hedges

17

20

Available for sale financial assets

(50)

25

Share of other comprehensive income of associates

13

5

Total comprehensive income for the year

2,744

637

Profit or loss for the year attributable to:

 

 

Owners of the parent

1,951

537

Noncontrolling interests

1,078

297

Basic earnings per share (in US$)

3.76

1.49

Diluted earnings per share (in US$)

3.76

1.49

Required:

• Question 1 - Identify whether the analysis of expenses in profit or loss is presented by nature or function.

• Question 2 - Identify the alternative performance (operating) measures presented in the statement of comprehensive income and document your conclusions with regard to the appropriateness of the various performance measures.

• Question 3 - Discuss any additional issues you have identified or other observations.

Reference no: EM131186673

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