Revenue Management System or Strategy

Question: Discuss about the Revenue Management System or Strategy. Answer: Introduction This report is based on the subject of revenue management. This report is prepared to present a proper revenue management strategy to the General Manager of Novotel Sydney on Darling Harbour for the financial year July 2016 to June 2017. The report has emphasized mainly on four key areas of the business and that areas are market segmentation, competitors analysis, demand forecasting and channel analysis. All of these four areas are related to the revenue earning capacity of the company. At the end of the report, conclusion is derived by considering the overall findings of the study and after that, recommendations are provided for the future revenue management of the company. Revenue management Revenue management refers to the business activity that helps to apply different techniques that predict the behavior of the customers and the future market trend at micro level. Revenue management system helps to maximize the growth of the revenue by optimizing the availability of product or services and price for the same. Novotel Sydney Darling Harbour is one of the well-known hotels that is operating its business successfully in Australia. However, recently, due to the increased competition in the market, the company is trying to improve its business performance by improving its revenue management system in a better manner. The revenue of a business organization is dependent on the market segments in which the organization operates the business. At the same time, revenue is also dependent on the demand and price of the product and services (Novoteldarlingharbour.com.au 2016). Therefore, it order to derive the best strategy for revenue management of Novotel Sydney Darling Harbour, it is important to analyze the market segment, competitor set, future demand and business channels. The analysis of each of these segments is stated below: Analyzing the market segmentation Novotel Sydney Darling Harbour provides its services at 4.5 star level. Presently, the hotel is providing all the possible comfort to its customers. The services of the hotel include car parking, car rental, dry cleaning, laundry service, hotel to airport transport, wireless internet connection, 24-hours room service and others. The management of the organization has segmented the market by three strategies psychographic segmentation, demographic segmentation and geographic segmentation (Novoteldarlingharbour.com.au 2016). Psychographic segmentation: The organization that is Novotel Sydney Darling Harbour has done the psychographic segmentation as per the life style of the people. The company has divided the market into two categories people who prefer to live advanced life-style and people who want to live general life style. The company has segmented the market as per the life style because the hotel business is dependent on the life style of the people. The people, who come under the first group, prefer to avail the services at 5 star, 4 start or 3 star level. However, the second group prefers to choose the hotels that provide the service at 2 star and 1 star level. Between two segments the company has targeted the first segment, means the people, who prefer to live advanced life-style (Novoteldarlingharbour.com.au, 2016). Demographic segmentation: Novotel Sydney Darling Harbour has segmented the market as per the demographic characteristics also. Mainly two factors the company has considered and that are income level of the people and age group of the people. As per the income level, the organization has divided the market into three categories high-level income group, upper middle-level income group and middle-level income group. The management of the company has targeted the first two level income group because the services that the hotel provides to the guests are of high quality and advanced (Masiero, Pan Heo, 2016). Therefore, the management needs to charge high price for the service, which can be availed by high-level income group and upper middle-level income group. On the other side, as per the age, the company has divided the market in to two segments people below 18 years age group and people above 18 years age group. The company has targeted the second age group because that age group i s able to take their own decision regarding the choice of hotels (Aha.org.au, 2016). Geographic segmentation: As per the geographic segmentation, the management of the hotel has segmented the market into three categories Asian market, European market and African market (Solnet, Boztug Dolnicar, 2016). Among all of these three segments, the hotel has given the first priority to the European market because each year maximum number of tourists or guests comes to Sydney from the European country. However, the organization has not ignored the other two segments of the market. In order to manage the revenue of the organization in a better manner, the management has can launch package system (Patiar, 2016). This package system will include different packages for the hotel guests. In order to create different packages, the management needs to consider the needs of each of its target segment. At the same time, the management can set the pricing as per the services available under each package. The possible packages are shown below: Market segments Available services Price European, Asian and African high income group Luxury accommodation, Wilson parking, dry cleaning, hotel to airport or city transport, laundry service, high speed wireless internet service for 24 hours, 24 hours room service, free breakfast, lunch, dinner, Yoga room, current Sydney and international channels, in balance gym, special accessible rooms, 24 hours telephone service, separate smoking zone and outdoor swimming pool. $1200 per night European, Asian and African upper middle-class income group Luxury accommodation, Harris street parking, 24 hours room and telephone service, laundry and dry cleaning service, free breakfast and dinner, 24 hours internet and TV channels, separate smoking zone and transport service to airport. $800 per night European, Asian and African middle-class income group Luxury accommodation, street parking, 24 hours room, telephone and internet service, laundry service, TV channels, free breakfast and different smoking zone. $400 per night Table 1: Proposed packages (Source: Created by author) Analyzing the competitor set There are four hotels, which are considered as the major competitors of Novotel Sydney Darling Harbour. The names of these competitors are Four Seasons Sydney, ADGE Apartment Hotel, The Langham Sydney and The Westin Sydney. All of these competitors are large hotels in Sydney, which are having the service facility at 4 to 5 star level. If the comparison is done between the performance of Novotel Sydney Darling Harbour and its competitors, then it can be said that Novotel Sydney Darling Harbour can improve its pricing strategy to improve its revenue management system. As price is the most important element of revenue management system of the organization, therefore, in order to analyze the revenue management of the competitors, it is very important to analyze their pricing strategy. As per the current pricing strategy at Four Seasons Sydney, the guests or tourists can enjoy the price discount offer for the time span between October to November in each year. At the same time, Four Seasons also provides offers in different packages. The pricing at Four Seasons Sydney is divided in to five packages Sydney Gateway, Advance Purchase, Bed and Breakfast, Romance package and New Years Eve. These five packages are available at different price ranges. In case of Sydney Gateway, the hotel offers 15% off on overall price; in Advance Purchase, 25% price off is available; in case of the Romance Package 2% surcharge is applicable and the rates change as per the availed services. Therefore, the revenue management system of the hotel becomes easier for the managers (Fourseasons.com, 2016). At ADGE Apartment Hotel, the price range varies as per the seasons. In the season between August to November, the hotel offer the services at 50% off. There are no such different packages available at ADGE Apartment Hotel. However, this hotel charge extra price for the reservation service (Adgehotel.com.au, 2016). On the other side, the price at The Langham Sydney varies as per the types of rooms. They offers different types of rooms like, Grand Langham room, Terrace room, Junior suite, Langham suite, The Residence and The Observatory suite. The price range differs as per the choice of rooms. At the same time, The Langham Sydney offers different packages also (Langhamhotels.com, 2016). Apart from these three, the price range at The Westin Sydney also has a specific structure. The price range at The Westin Sydney differs as per the availed service and booking system. If the guests book the hotel room through direct hotel channel, then they do not have to pay for the Wi-Fi facility and water. However, if the people book the hotel room through some different agencies, then they have to pay extra money for Wi-Fi and water (Westinsydney.com, 2016). Therefore, in the above discussion, it can be identified that the major competitors of Novotel Sydney Darling Harbour has applied different pricing strategies in order to manage their revenue in better way. The competitors have managed their revenue by providing different offers and packages, so that the guests or customers feel value for their money. Moreover, maximum competitors of Novotel Sydney Darling Harbour have applied the offer strategy for better revenue management. This particular strategy helps the hotels to attract more customers during the pick seasons like, July to November. Demand forecasting Hotel or Hospitality industry in Australia is the most important sector of the country. Due to the beautiful natural view and wildlife, the country is always at the top choice to the tourists in different countries. Among all of the tourist places in Australia, Sydney is the most popular and currently it is occupying 74.4% of hotel accommodation. However, as per the comment of Baker Magnini (2016), the overall revenue of the industry is declining because of decrease in the demand from tourists and corporate segments. On the contrary, Yang Cai (2016) mentioned that the hospitality industry in Australia has achieved 3.1% annual growth during 2015-2016, which denote the sector is having demand at a satisfactory level. Therefore, from the above information, it can be clearly understood that overall demand in the hotel industry is still at positive point and the revenue growth of the industry is going on. This is good for the organizations, which are operating their business in the Australian Hospitality industry (Ortega Ortega, 2016). The industry data has also disclosed that the hospitality industry in Australia is providing service to 1 million visitors or tourists in each year since 2010 (Tan, 2015). However, Kandampully Zhang Bilgihan (2015) stated that before the financial year 2010, the industry provided service to one and half million people. This is clearly disclosing the fact that the demand has declined. According to Tang, King Kulendran (2015), the main reason behind the declined demand in Australian hotel industry is the global financial crisis. The number of visitors from the corporate segment has declined in last five years. Therefore, the above discussion is indicating that Novotel Sydney Darling Harbour needs to take careful steps to maintain its financial performance. As the demand is declining due to the global financial crisis, the organization needs to take better pricing strategy so that it can attract the corporate segment again. Cox (2015) noted that currently the people in the corporate segment think to save their money for better future. This type of mentality of the people may create barrier for the company in enhancing the number of customers. At the same time, Tan (2015) added that the continuous rise in food price, energy cost and interest rates is de-motivating the people to avail the service of luxurious hotels. Therefore, it can be said that in coming financial years, the company needs to revise its pricing strategy to manage its revenue in better manner. It is expected that in the next financial year, the demand will not decline if Novotel Sydney Darling Harbour start the package system. It can also be expected that the hotel will be able to attract at least 20% of the total visitors in the industry. The demand is expected to be similar like this year. However, the management of the organization needs to take appropriate steps in order to face any uncertain situation. Channel analysis Tourists and the other visitors are the most important element for the better revenue management of a hotel (Weatherford, 2016). Better revenue management denotes better improvement in the revenue volume. The revenue of the organization that is Novotel Sydney Darling Harbour can be improved by using proper channels. The revenue growth of the organization is highly dependent on the channels that it uses for creating awareness among the people regarding its services. Nieves Diaz-Meneses (2016) suggested that in order to increase the revenue, the hotels in Australia must focus on the technological advancement. The use of better technology will help the managements to provide the service within minimum possible time. The adoption of digital marketing is the better way to improve the revenue. Presently, Novotel Sydney Darling Harbour uses the social media and personal websites to promote their new offers and services. The use of social media is very effective in the current situation because most of the people use social media for different purposes (Ng Lien, 2014). Therefore, by using social media, it becomes easier to attract the people. At the same time, the use of social media is less costly for the organization. However, as social media is a very common platform, most of the hotels in Australia and other countries are using this channel for promoting their services. There are many hotels in Sydney, which are using the email strategy for providing personal touch to their existing and prospective customers (Melissen, 2013). However, this type of strategy has not been taken by Novotel Sydney Darling Harbour. On the other side, the use of personal website as the channel of promotion is not effective to attract the customers, who have no idea about the hotel (McManus, 2013). If a person does not know anything about the services of the hotel or the name of the hotel, then it is very difficult to attract the person through websites. Therefore, using the website, Novotel Sydney Darling Harbour cannot attract more customers or in the other words, the hotel cannot increase its revenue more. Therefore, in order to improve the revenue management of Novotel Sydney Darling Harbour, it is very important to use new channels for promotion (Mok, Sparks Kadampully, 2013). As the current market is very competitive and the demand in the industry is declining, it is very essential to use advanced channels for promoting the services. However, at the same time the management of the organization also needs use such a channel that can represent the company to a wide range of customers. In that case, Novotel Sydney Darling Harbour can use television advertisement and sales promotion. With the help of television advertisement, the management of the hotel can reach to a large number of prospective customers. Television advertisement not only helps to attract the young people, but also helps to attract the old people, who are not much accustomed with the use of social media and visiting the companys website. Apart from the television advertisement, the organization that is Novotel Sydney Darling Harbour, can also apply the sales promotion strategy. Sales promotion is such a channel that attracts not only the new customers, but can attract the old customers or guests also. Different offers and discounts help the management to compete in the market and attract the customers of other hotels. However, the offers and discounts must be competitive enough. Conclusion In this report, it has been identified that presently, the demand in the Australian hospitality is in declining trend. After the financial year 2010, the number of visitor in the Australian hospitality industry decreased from one and half million to one million. One of the main reasons behind this declining situation is the global financial crisis. Due to the global financial crisis, the people became more conscious about savings. They are more interested to save their money for future. The number of visitors from corporate segment has decreased tremendously. In case of Novotel Sydney Darling Harbour, the management has segmented the market as per psychographic, demographic and geographic segments. As per the segmentation done by the management of Novotel Sydney Darling Harbour, the hotel has prioritized the European segment than the Asian and African segment. The organization has focused on the age group that is above 18 years and at the same time, the organization has also focused on the higher-class and upper middle-class income group. Apart from that, the report has also identified that there are four major competitors of Novotel Sydney Darling Harbour. The competitors of the organization have applied different pricing strategies to improve their financial performance. However, in order to improve the revenue management, Novotel Sydney Darling Harbour needs to use better channels for promoting its services. Recommendations As per the analysis and discussion done in the report, the following recommendations are made for better revenue management of Novotel Sydney Darling Harbour: Adopt the package pricing system: This is one of the best strategy for better revenue management at Novotel Sydney Darling Harbour. The package pricing system will help the management to control their cost because the company will provide specific services in specific package. Apply new and advanced technology: Novotel Sydney Darling Harbour can apply advanced technology to provide its services within a short time span. This will help the organization to satisfy its customers in better manner, which will ultimately help to enhance the customer base. Use television advertisement and sales promotion: The hotel can use the television advertisement and sales promotion as the channels for promoting the services. These two channels are very effective to attract a large number of customers. Reasonable price range: The management of the hotel needs to keep the price at a reasonable range because due to the global financial crisis, the spending capacity of the people has dropped down and the people are interested to save money. Therefore, to attract the customers Novotel Sydney Darling Harbour needs to keep the price range reasonable. Reference list: Adgehotel.com.au. (2016). Adgehotel.com.au. Retrieved 7 August 2016, from https://adgehotel.com.au/ Aha.org.au. (2016). Australian Hotels Association. Retrieved 7 August 2016, from https://aha.org.au/ Baker, M., Magnini, V. P. (2016). The evolution of services marketing, hospitality marketing and building the constituency model for hospitality marketing.International Journal of Contemporary Hospitality Management,28(8). Cox, C. (2015). Consumer experiences of accommodation deals purchased via social coupon promotions: An Australian perspective.Journal of Hospitality Marketing Management,24(6), 609-632. Fourseasons.com. (2016). Fourseasons.com. Retrieved 7 August 2016, from https://www.fourseasons.com/sydney/ Kandampully, J., Zhang, T., Bilgihan, A. (2015). Customer loyalty: a review and future directions with a special focus on the hospitality industry.International Journal of Contemporary Hospitality Management,27(3), 379-414. Langhamhotels.com. (2016). Langhamhotels.com. Retrieved 7 August 2016, from https://www.langhamhotels.com/ Masiero, L., Pan, B., Heo, C. Y. (2016). Asymmetric preference in hotel room choice and implications on revenue management.International Journal of Hospitality Management,56, 18-27. McManus, L. (2013). Customer accounting and marketing performance measures in the hotel industry: Evidence from Australia.International Journal of Hospitality Management,33, 140-152. Melissen, F. (2013). Sustainable hospitality: a meaningful notion?.Journal of sustainable Tourism,21(6), 810-824. Mok, C., Sparks, B., Kadampully, J. (2013).Service quality management in hospitality, tourism, and leisure. Routledge. Myung, E., McClaren, A., Li, L. (2012). Environmentally related research in scholarly hospitality journals: Current status and future opportunities.International Journal of Hospitality Management,31(4), 1264-1275. Ng, E., Lien, C. Y. (2014). Impact of social media in service innovations: An empirical study on the Australian hotel industry.Quality innovation: knowledge, theory, and practices, 390-405. Nieves, J., Diaz-Meneses, G. (2016). Antecedents and outcomes of marketing innovation: an empirical analysis in the hotel industry.International Journal of Contemporary Hospitality Management,28(8). Novoteldarlingharbour.com.au. (2016). Novoteldarlingharbour.com.au. Retrieved 7 August 2016, from https://www.novoteldarlingharbour.com.au/ Ortega, B., Ortega, B. (2016). Revenue management systems and hotel performance in the economic downturn.International Journal of Contemporary Hospitality Management,28(4), 658-680. Patiar, A. (2016). Costs allocation practices: Evidence of hotels in Australia.Journal of Hospitality and Tourism Management,26, 1-8. Solnet, D., Boztug, Y., Dolnicar, S. (2016). An untapped gold mine? Exploring the potential of market basket analysis to grow hotel revenue.International Journal of Hospitality Management,56, 119-125. Tan, J. (2015). Impacts of service innovation in the Australian luxury hotel sector.CAUTHE 2015: Rising Tides and Sea Changes: Adaptation and Innovation in Tourism and Hospitality, 726. Tang, C. M. F., King, B. E., Kulendran, N. (2015). Estimating Future Room Occupancy Fluctuations to Optimize Hotel Revenues.Journal of Travel Tourism Marketing,32(7), 870-885. Weatherford, L. (2016). The history of forecasting models in revenue management.Journal of Revenue and Pricing Management. Westinsydney.com. (2016). The Westin Sydney | Official Website | Best Rates, Guaranteed.. Retrieved 7 August 2016, from https://www.westinsydney.com/ Yang, Z., Cai, J. (2016). Do regional factors matter? Determinants of hotel industry performance in China.Tourism Management,52, 242-253.

Jrjrjr free essay sample

You will also refine your ability to analyze literary texts, learning about he basic principles that are important to critical writing and reading. These skills will enable you both to understand the complex issues that surround us and to act upon this knowledge. Criteria for Success: Do not view this class as a throw-away requirement but instead recognize this course as an opportunity to refine your ability to think and to write about important issues in critical and effective ways with the support and encouragement of your peers. Attend class regularly, arrive on time, with all electronic devices turned OFF, and stay for the entire period. Complete all empower on time and come to class prepared to discuss readings and other assignments. Complete all essays on time and provide all back-up materials required for each assignment. Course requirements: You will write three essays and a number of short pieces in this class. Essay assignments will vary in length from 1000 to 1500 words or approximately four to six pages. All essays will require first, second, and final drafts. Your classmates and instructor will comment on your drafts and provide suggestions for improvement. These should give you a clear idea of how much revision each piece needs. In addition, you will revise one of your first two essays and write a reflective introduction in which you explain your development as a writer in this course. This class will also include daily reading assignments, written responses, quizzes, and instruction on mechanical and grammatical conventions. Grading Policy: Your final grade will be based on the following course requirements: Essay 1 15% Essay 2 Essay 3 Participation Homework 25% Revised Essay Note: For each essay assignment, you need to attend all sessions of peer review and submit copies of your rough drafts with your final draft.If you sis peer review without a valid, documented excuse, I will deduct 10 points from your grade on the final draft. Note on grades in general: A C is the average grade for a student in English 185. This grade shows that you have successfully completed all of the assigned steps in constructing each essay: done all of the preparatory reading and pre-writing participated in group discussion, worke d through and prepared at least one rough draft, received response from your peer group in class and/ or from me in conference, revised the essay as necessary, and submitted the paper in final form for evaluation.A grade of C in this class requires a good deal of work; this is an honorable grade and must be earned through serious effort. Absence policy: Because writing skills develop over time, students regular attendance is essential in English 185 You are allowed three absences without penalty for the entire semester. After three absences, will deduct one point from your final grade for each additional absence if you do not have a valid, documented excuse. Further, you are responsible for any work due or assigned on the day of your absence.I reserve the right to amend or abridge the class schedule at any time. If you are not in class, you must make sure no changes have been made during your absence. Make-up Policy: I do not accept late work for full credit; however, I realize that during the course of the semester, various illnesses and emergencies will arise, so I will give each student an extension on one Of the three take-home essays. With this extension, you will be able to submit the paper at the start of the following class meeting. In order to take advantage of this extension, you must communicate with me at least 24 hours prior to the essays due date. If you turn a paper in late without prior permission, will lower your read by 1 0 points every day that the essay is late. Behavior: This is a university class, and students should be respectful of all people in the academic setting. Students should also be respectful of differences of opinion as divergent interpretations often lead to stimulating and rewarding class sessions. Ill not tolerate any disruptions talking while someone else is speaking, answering your cell phone during class discussion, sending text messages during the period that adversely impact either my ability to conduct class or my students ability to learn. If your behavior is not appropriate to the academic setting, will ask you to leave class for the period, mark you absent, and deduct ten points from your participation grade. Academic Honesty: Plagiarism will not be tolerated in this class or any other at Oxford College. This course requires research on some assignments and takes advantage of group collaboration, critique, and/or brainstorming. It can be hard to clearly separate your own thoughts and analysis from those of others. Here are some guidelines: Plagiarism is the act of using ideas, words, sentences, or paragraphs without giving credit to the author and presenting these words or ideas as your own. Plagiarism is also the act of allowing someone else to substantially edit, alter, or write an assignment for you.The most common type of plagiarism is accidental and usually done out of confusion and inexperience. The student usually does not realize what he or she is doing is wrong or may not know how to cite sources correctly. We will be examining this area closely in class. Please feel free to ask questions about this subject It is your responsibility to understand the Honor Code, which you can read about in the Oxford College Catalog. If you have any questions about this logic, please ask me before submitting the first essay.

Conceptual Framework Essay Example

Conceptual Framework Essay RELEVANT TO ACCA QUALIFICATION PAPER F7 AND PERFORMANCE OBJECTIVES 10 AND 11 The need for and an understanding of a conceptual framework This topic forms most of Section A (and has an influence on Section B) of the syllabus for Paper F7, Financial Reporting. A conceptual framework is important to the understanding of the many principles and concepts that underpin International Financial Reporting Standards (IFRS) and is an often-neglected part of candidates’ studies. Questions from these areas regularly appear in Paper F7 exams – usually as Question 4 – and I often comment in my examiner’s report that they are the least well-answered question in the exam paper; the questions also have a high incidence of candidates not attempting them at all. This article is intended to illustrate the relevance and importance of this topic. What is a conceptual framework? In a broad sense a conceptual framework can be seen as an attempt to define the nature and purpose of accounting. A conceptual framework must consider the theoretical and conceptual issues surrounding financial reporting and form a coherent and consistent foundation that will underpin the development of accounting standards. It is not surprising that early writings on this subject were mainly from academics. Conceptual frameworks can apply to many disciplines, but when specifically related to financial reporting, a conceptual framework can be seen as a statement of generally accepted accounting principles (GAAP) that form a frame of reference for the evaluation of existing practices and the development of new ones. We will write a custom essay sample on Conceptual Framework specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Conceptual Framework specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Conceptual Framework specifically for you FOR ONLY $16.38 $13.9/page Hire Writer As the purpose of financial reporting is to provide useful information as a basis for economic decision making, a conceptual framework will form a theoretical basis for determining how transactions should be measured (historical value or current value) and reported – ie how they are presented or communicated to users. Some accountants have questioned whether a conceptual framework is necessary in order to produce reliable financial statements. Past history of standard setting bodies throughout the world tells us it is. In the absence of a conceptual framework, accounting standards were often produced that had serious defects – that is: †¢ they were not consistent with each other particularly in the role of prudence versus accruals/matching †¢ they were also internally inconsistent and often the effect of the transaction on the statement of financial position was considered more important than its effect on income the statement  © 2011 ACCA 2 THE NEED FOR AND AN UNDERSTANDING OF A CONCEPTUAL FRAMEWORK OCTOBER 2011 †¢ †¢ †¢ tandards were produced on a ‘fire fighting’ approach, often reacting to a corporate scandal or failure, rather than being proactive in determining best policy. Some standard setting bodies were biased in their composition (ie not fairly representative of all user groups) and this influenced the quality and direction of standards the same theoretical issues were revisited many times in successive standards – for example, does a transaction give rise to an asset (research and development expenditure) or liability (environmental provisions)? It could be argued that the lack of a conceptual framework led to a proliferation of ‘rules-based’ accounting systems whose main objective is that the treatment of all accounting transactions should be dealt with by detailed specific rules or requirements. Such a system is very prescriptive and inflexible, but has the attraction of financial statements being more comparable and consistent. By contrast, the availability of a conceptual framework could lead to ‘principles-based’ system whereby accounting standards are developed from an agreed conceptual basis with specific objectives. This brings us to the International Accounting Standards Board’s (IASB) The Conceptual Framework for Financial Reporting (the Framework), which is in essence the IASB’s interpretation of a conceptual framework and in the process of being updated. The main purpose of the Framework is to: †¢ ssist in the development of future IFRS and the review of existing standards by setting out the underlying concepts †¢ promote harmonisation of accounting regulation and standards by reducing the number of permitted alternative accounting treatments †¢ assist the preparers of financial statements in the application of IFRS, which would include dealing with accounting transactions for which there is not (yet) an accounting standard. The Framework is also of value t o auditors, and the users of financial statements, and more generally help interested parties to understand the IASB’s approach to the formulation of an accounting standard. The content of the Framework can be summarised as follows: †¢ Identifying the objective of financial statements †¢ The reporting entity (to be issued) †¢ Identifying the parties that use financial statements †¢ The qualitative characteristics that make financial statements useful †¢ The remaining text of the old Framework dealing with elements of financial statements: assets, liabilities equity income and expenses and  © 2011 ACCA 3 THE NEED FOR AND AN UNDERSTANDING OF A CONCEPTUAL FRAMEWORK OCTOBER 2011 hen they should be recognised and a discussion of measurement issues (for example, historic cost, current cost) and the related concept of capital maintenance. The development of the Framework over the years has led to the IASB producing a body of world-class standards that have the following advantages for those companies that adopt them: †¢ IFRS are widely accepted as a set of high-quality and transparent global standards that are intended to achieve consistency and comparability across the world. They have been produced in cooperation with other internationally renowned standard setters, with the aspiration of achieving consensus and global convergence. †¢ Companies that use IFRS and have their financial statements audited in accordance with International Standards on Auditing (ISA) will have an enhanced status and reputation. †¢ The International Organisation of Securities Commissions (IOSCO) recognise IFRS for listing purposes – thus companies that use IFRS need produce only one set of financial statements for any securities listing for countries that are members of IOSCO. This makes it easier and cheaper to raise finance in international markets. †¢ Companies that own foreign subsidiaries will find the process of consolidation simplified if all their subsidiaries use IFRS. †¢ Companies that use IFRS will find their results are more easily compared with those of other companies that use IFRS. This should obviate the need for any reconciliation from local GAAP to IFRS when analysts assess comparative performance. It is not the purpose of this article to go through the detailed content of the Framework; this is well documented in many textbooks. At this point I would stress that it is important to think about what the content of the Framework really means; it is not enough merely to rote learn the principles/definitions. This is because an understanding and application of these topics will be tested in exam questions and it is on these aspects that candidates perform rather poorly. As previously mentioned, this topic is generally examined as Question 4 (worth 15 marks). Typically, the question will identify two or three areas of the Framework and ask for a definition or explanation of them – for example, the definition of assets and liabilities, an explanation of accounting concepts such as substance over form or materiality, or qualitative characteristics such as relevance and reliability. This section will usually be followed by short scenarios intended to test candidates’ understanding and their ability to apply the above knowledge.  © 2011 ACCA 4 THE NEED FOR AND AN UNDERSTANDING OF A CONCEPTUAL FRAMEWORK OCTOBER 2011 Here are a few examples of past questions. June 2008 exam (a) The IASB’s Framework for the Preparation and Presentation of Financial Statements requires financial statements to be prepared on the basis that they comply with certain accounting concepts, underlying assumptions and (qualitative) characteristics. Five of these are: †¢ Matching/accruals †¢ Substance over form †¢ Prudence †¢ Comparability †¢ Materiality Required Briefly explain the meaning of each of the above concepts/assumptions. (5 marks) (b) For most entities, applying the appropriate concepts/assumptions in for inventories is an important element in preparing their financial statements. Required Illustrate with an example how each of the concepts/assumptions in (a) may be applied to accounting for inventory. (10 marks) (15 marks) Observations This question illustrates the progression of the topic from Paper F3 to F7. Part (a) is not much more than expected knowledge from F3, however Part (b) progresses this knowledge. It requires the application of each of the concepts, not to just any situation, but specifically to inventory thus illustrating how a single transaction (inventory in this case) can be subject to many different accounting concepts. June 2010 exam (a) An important aspect of the International Accounting Standards Board’s (IASB) Framework for the Preparation and Presentation of Financial Statements is that transactions should be recorded on the basis of their substance over their form. Required Explain why it is important that financial statements should reflect the substance of the underlying transactions and describe the features that may  © 2011 ACCA 5 THE NEED FOR AND AN UNDERSTANDING OF A CONCEPTUAL FRAMEWORK OCTOBER 2011 indicate that the substance of a transaction may be different from its legal form. Observations Part (a) is based on the important topic of substance over form. Note the question does not ask for a definition of the concept (this would be more for Paper F3); instead it asks why the concept is important and what features may indicate that the substance of a transaction may be different to its legal form. In other words, how do we identify such transactions? Most answers to this question merely gave a definition of substance and an example (inevitably leasing) of its use in financial statements. Part (b) consisted of a numerical example related to a sale and re-purchase agreement to illustrate the difference that the application of substance has on financial statements (compared to the legal form). June 2011 exam (a) Your assistant has been reading the IASB’s Framework for the Preparation and Presentation of Financial Statements (the Framework) and, as part of the qualitative characteristics of financial statements under the heading of ‘relevance’, he notes that the predictive value of information is considered important. He is aware that financial statements are prepared historically (ie after transactions have occurred) and offers the view that the predictive value of financial statements would be enhanced if forward-looking information (for example, forecasts) were published rather than backward-looking historical statements. Required By the use of specific examples, provide an explanation to your assistant of how IFRS presentation and disclosure requirements can assist the predictive role of historically prepared financial statements. (6 marks) Observations Again Part (a) is themed on the Framework: the important characteristic of relevance. This is such an import characteristic that the Framework says (implicitly) that if information is not relevant, it is of no use. This question focuses on a particular aspect of relevance; that of predictability. Predictability recognises that users of financial statements are very interested the future performance of an entity. The core of this question was about how historical information can be presented, such that it enhances the predictive value of financial statements.  © 2011 ACCA 6 THE NEED FOR AND AN UNDERSTANDING OF A CONCEPTUAL FRAMEWORK OCTOBER 2011 From memory I would say that this (section) question had the highest number of candidates that did not give any answer; and of those that did, very few scored more than half of the available marks. Part (a) was followed by a section on continuing and discontinued operations, and a calculation of diluted earnings per share. If these topics had been mentioned in Part (a) alone, it would have gained two of the six marks available. Conclusion Simply look out for more of this type of question – it is an important area and should not be neglected. Steve Scott is examiner for Paper F7  © 2011 ACCA

Aboriginals in Canada and Mexico essays

Aboriginals in Canada and Mexico essays For many years, Aboriginal people in Canada and Mexico have fought for political sovereignty and self-government. While Canada and Mexico are two different countries with two different cultures and histories, the Aboriginal peoples fight in both countries is strikingly similar. Both groups of people have been fighting a war against assimilation and the utter destruction of their culture. While some groups have lost parts of their culture to absorption, these Aboriginals strive to preserve or regain any parts of their heritage that they can. They have been overwhelmed by European colonies and societies and have come under their rule. Aboriginal people in Canada and Mexico are expected to live under Canadian or Mexican government when they are a different people than those who attempt to preside over them. These Aboriginal people have to come to believe that the respective governments should grant autonomy and that they should be able to be their own separate entity within the already established borders of Canada and Mexico. Learning about Canadas history lends some background on how the native peoples there became repressed. Surprisingly enough, European settlers and explorers first treated the Natives of North America as a sovereign nation, completely equal in law. Relations between Europeans and Natives varied from friendly trades to hostile battles, yet the Natives were never defeated or surrendered in any way. Conversely, many Indian groups did end up signing treaties with Europeans that would continue to haunt them for generations to come. Once the Natives came under settler rule, the Europeans planned that eventually find a place for Aboriginals in the social contract (8). Still, this posed a problem for both groups because European settlers could not see the Aboriginal people as fit for inclusion in their society. Instead Indians were seen as a primitive civilization with no rights to citizenship. So...

Assignment Example | Topics and Well Written Essays - 750 words - 98

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Major disadvantages of pizza hut interactive table Essay

Major disadvantages of pizza hut interactive table - Essay Example Second, the platform is vulnerable to uncertainties of technology. Software bugs and failures during a busy session will bring a restaurant to stand still. This will be especially the case if customers get overly used to the platform. It is worth noting that the platform is yet to be tested severely and such software bugs and failures are a possibility. The way to overcome this challenge is through pilot testing the platform before rolling it out fully. Thirdly, the system like any other electronic system is vulnerable to malicious hacking. Malicious hackers may hack the platform and modify customer order contents. This will likely cause uproar in a restaurant as customers get served with what they did not actually order. In order to overcome this challenge, an alternative method should be readily available in case of a failure of the platform. Zolfagharifard, Ellie. Pizza Hut reveals interactive table concept that lets you design your perfect pie. Daily Mail, 4 March, 2014. Web. April 28, 2015.

Project Team Building Strategies Assignment Example | Topics and Well Written Essays - 1000 words

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