OBU have announced the prescribed industry sectors for Period 39 and 40 for topics 8 & 15
The new Information Pack is also available on ACCA global. Please note that the revised Appendix 1 gives more detailed information about what is required in terms of the Assessment Criteria both to pass and for higher grades so is worth consulting
For the above topics and submission dates you MUST use organisations from the following specific sectors, based on the Industry Classification Benchmark (ICB):
The Industry Classification Benchmark is being updated with a new structure adopted on 1 July 2019. The codes used below are the new codes (the codes in the older version are given in brackets).
This link maps new codes to the older version of the definition of the sectors
https://www.ftserussell.com/files/support-document/current-new-icb-structuralconversion-map-detail
This is the link to the older version of the sectors
https://research.ftserussell.com/products/downloads/ICBStructure-Eng.pdf
1. 4010 Automobiles & Parts (3350 in older version) 4010020 Automobiles (3353 in older version) - Makers of motorcycles and passenger vehicles, including cars, sport utility vehicles (SUVs) and light trucks. Excludes makers of heavy trucks, which are classified under Commercial Vehicles & Trucks, and makers of recreational vehicles (RVs and ATVs), which are classified under Recreational Products
40101025 Auto parts (3355 in older version) - Manufacturers and distributors of new and replacement parts for motorcycles and automobiles, such as engines, carburetors and batteries. Excludes producers of tires, which are classified under Tires.
40101015 Tires (3357 in older version) - Manufacturers, distributors and retreaders of automobile, truck and motorcycle tires.
2. 4030 Media (5500 in older version) 40301010 and 40301035 Broadcasting & Entertainment (5553 in older version) - Producers, operators and broadcasters of radio, television, music and filmed entertainment. Excludes movie theatres, which are classified under Recreational Services.
40301020 Media agencies (5555 in older version) - Companies providing advertising, public relations and marketing services. Includes billboard providers and telemarketers.
40301030 Publishing (5557 in older version) - Publishers of information via printed or electronic media.
3. 502060 Industrial Transportation (2770 in older version) 50206010 Trucking (2779 in older version) - Companies that provide commercial trucking services. Excludes road and tunnel operators, which are classified under Transportation Services, and vehicle rental and taxi companies, which are classified under Travel & Tourism.
50206020 Railroads* (2775 in the older version) - Providers of industrial railway transportation and railway lines. Excludes passenger railway companies, which are classified under Travel & Tourism. (Topic 8 or 15 * see note below).
50206025 Railroad equipment (2753 in the older version)
50206030 Marine Transportation (2773 in the older version) - Providers of on-water transportation for commercial markets, such as container shipping. Excludes ports, which are classified under Transportation Services, and shipbuilders, which are classified under Commercial Vehicles & Trucks.
50206040 Delivery Services - Operators of mail and package delivery services for commercial and consumer use. Includes courier and logistic services primarily involving air transportation.
50206060 Transportation Services - Companies providing services to the Industrial Transportation sector, including companies that manage airports, train depots, roads, bridges, tunnels, ports, and providers of logistic services to shippers of goods. Includes companies that provide aircraft and vehicle maintenance services.
* if you are considering topic 8 or 15 please be aware that this sub-sector may be difficult as much infrastructure is publicly owned. There may not be sufficient information to support your analysis, or the accounts may be very complex.
Other Accountancy Qualifications
Topics 8 & 15 Period 39, 40 and 41
No - but do not translate currencies as this will introduce artificial differences based solely on the rate used.
The ratios mean that comparisons can be made mostly on the basis of these ratios (no currencies are involved as you would be using straight percentages) and comparison in revenue and share price are best done on year on year percentage increase/decrease differences
Thanks @trephena
Hi All.
My main company and comparator company both use the US-GAAP standard. Does this really have any effect or pose any challenge for my RAP?
Hi @trephena and @gillianM
I will be submitting my rap project in period 39. I would kike to ask some questions.
1) The companies I'm using have its financial statements in Euro and Dollars
My main company uses Euros, do i need to translate the comparator financial results?
2) while financially comparing do i need to compare the financial results like this for a 3 year period i.e 2015-2016 , 2016-2017, 2017-2018 or 2016-2017, 2017-2018?
Please answer
Regards
Please answer
Please think about this logically would for example dividend per share make any sense if you translated it? When doing trends and making comparisons your results may be influenced purely by the rates you used and so would you be making fair year on year comparisons for the company's results if you were translating? Conceivably in the original currency revenue could show increases but if the exchange rate changed significantly between years these might even show a decrease after your translation so the trends could be very misleading. Also the company is not necessarily making strategic decisions based on exchange rates - particularly if their suppliers and customers are predominantly based in the same country.
If you read through previous posts you will find that ratios obviate the need to translate currencies and by attempting translation you would be introducing some artificial differences purely by introducing an arbitrary conversion rate anyway. The only time you cannot really use ratios are when looking at basic figures e.g. turnover and share price however it is fine to look at year on year changes for the individual companies here and compare trends. Otherwise stick to ratios (without any need to translate) as they make comparisons more valid.
The topic title clearly states you should be looking at a 3 year period but look at this on the basis of trends. Again think about it logically - the Board does not sit down on the first day of the financial year and make all of its decisions and plans and neither do these end on the last day of the financial year. Doing a strict year by year comparison between the companies does not make sense and again is not how things work in the real world!
Hi @gillianM
Thank you for you detailed response, it cleared many aspects.
1) As you said there is no need to translate the financials. So it is okay to insert the financials of the respective companies in the excel sheet in their original currency, right?
2) Can you please elaborate the 2nd part, like for e.g revenue improved from last year(2016) by 5% in 2017 and in 2018 3% as compared to 2017,
Or we have to state that revenue in 2016 increased by 4% as compared to 2015 and then carry on?
Please answer
Regards
@theadiltaher said: Hi @gillianM , Thank you for you detailed response, it cleared many aspects. 1) As you said there is no need to translate the financials. So it is okay to insert the financials of the respective companies in the excel sheet in their original currency, right? 2) Can you please elaborate the 2nd part, like for e.g revenue improved from last year(2016) by 5% in 2017 and in 2018 3% as compared to 2017, Or we have to state that revenue in 2016 increased by 4% as compared to 2015 and then carry on? Please answer RegardsHi @gillianM , @trephena Addition to 1) currency issue, what must we do if we have to present the data in bar charts, graphs etc. we can not simply compare the ratios, right? So is it possible to translate the currencies then and compare it?
What part of the instruction "Do not translate currencies" do you NOT understand?
You compare straight ratios calculated from the annual reports - and as explained these should not be translated -and to do so is WRONG because it introduces artificial differences that do not exist in reality!
I suggest that you re-read my answer
Hello @gillianm and @trephena
I am preparing for topic 8 Period 39 submission. I have a quick question about RAP. Can you please guide me on the following?
One of my friends failed RAP and he got comments like the website he referred was inappropriate, so how can I assure that the website I'm referring is appropriate?
One of the sources I'm using to gather information is Newspaper forums (e-sources). So do I need to enquire about the appropriateness of analyst/author who wrote the forums?
Hi Gillianm,
Thanks for spending time responding to this.
I'm planning for topic 8 period 39 submission. I have chosen to go ahead with 4010020 Automobiles industry, I chose main company as Bajaj Auto Ltd and competitor Hero Motor Corp or TVS motor.
The problems that I face are:
1) Main company and competitor are subsidiaries of a Group of companies. Is it an issue if it is a subsidiary in a group or if the group has diversified companies?
2) Main company and competitors do have subsidiaries within themselves, will it be a problem if it has subsidiary companies within them and diversified subsidiary companies?
Thank You
Hello GilianM,
Hope you are doing fine.
I am planning to submit my RAP for period 39.
I have chosen IFAD AUTOS and AFTAB AUTOMOBILES, both companies are operating in Bangladesh. They come under Automobiles and parts. I have got the recent annual report for both these company year ending June 2018, however, both companies have third quarterly reports available. Should I do the ratio analysis for y/e June 2018 or I have to do it till third quarters end March 19.
Can you please guide ?
Hello GilianM,
Hope you are doing fine.
I am planning to submit my RAP for period 39.
I have chosen IFAD AUTOS (assemble truck, covered van, light commercial vehicle, and bus) and AFTAB AUTOMOBILES (assemble Toyota Land Cruiser soft top/ Pick-up, Land Cruiser Prado, Hino Bus, Hino Mini Bus/ Truck), both companies are operating in Bangladesh. I am not sure whether they fall under Automobiles and parts category.
Could you confirm me whether they fall under 4010 Automobiles and parts category?
Thank you
Hi @trephena and @gillianM
I am preparing RAP on T8 for Nov '19 submission. A quick question regarding information gathering,
I have observed that in the Annual Report of the company I have selected have the prepaid expense of INR 4.18m in 2018 annual report but in the Annual Report of 2019, there are prepaid expenses of INR 16.17m in 2018 as a comparative.
This is the case for many figures like the cost of sales, Revenue, EPS, etc
I have read the full Annual Report but I couldn't find any notes regarding the same.
Should I use figures of 2018 from AR 2018 or from Comparative of 2019 ??
Also if you can highlight the reason behind the inconsistency in figures ??
Sounds like figures have been restated. Take the figures from 2019 as they are the latest. There should be something normally in the annual report though....so I'm not sure why they are silent on this (possibly something in the quarterly statements that refers?)
You could mention this in your limitations and explain as the 2019 report is more recent you are going with that
Thank you @GillianM
I have came across one more question if you could guide on that also.
- Bibliography and list of references are the two different things. As bibliography refers as reading a wider area not cited directly.
My question is when I press an icon “create bibliography” in word it takes all the references so the bibliography and list of references looks similar. Theoretically I know the difference. But can you please guide on how to create list of references and bibliography in word?????
I can't but there may be a You Tube video.
(The 11 page Reference list for my Masters Thesis and my fairly short bibliography were done manually [reflecting how we had to do things 'back in the day'] -reminds me of a quip from a child who when told his Uncle Simon had made a particular model for a train set over 60 years ago asked 'is that when dinosaurs were around?' :-D
hi GilianM or Trephena,
can i know whether it would be an issue if two companies using different accounting standard (1st company IFRS, 2nd company US.GAAP)?
Ideally both companies should be using th same accounting standards. However where this is not possible you will need to mention it in your limitations section in Part 2 and again in any part of the analysis where different Standards interferes with or impact on the subsequent analysis
Hi Gillian and Trephena
May you kindly advise the extent of use of the comparative company. Initially ihad thought to use it only when comparing ratios as that had been muy understanding of the the instruction. However from the above chats I am not sure whether I should be comparing other business aspects also.
Further I would want to know if a company`s letter to investors in 2012 explaining a new strategy (which is still relevant) can be used and referenced. or it is against the instruction below
For your first submission or resubmission involving a new topic or organisation the programme requirement is that: You must use the last 3 years’ accounts available 90 days before the start of the submission period
The key thing to doing a successful submission for Topic 8 is to appreciate the importance of the business analysis. Too often students think that ratios are the be all and end all and consequently therefore do not put sufficient focus on how important strategy (and also the factors that influence and impact on this i.e the SWOT and PEST) contribute to a company's success or otherwise.
So to answer your last point first, provided the strategies from this 2012 letter are still relevant for its current financial performance then it is perfectly acceptable to refer to it although your financial analysis will only be looking at figures from the last 3 financial years.
Moving on to your first point about the competitor - some basic awareness of their strategies will always be useful as just saying that one company outperformed the other is considered inadequate analysis (basically anyone come to that conclusion if they looked at the figures). Therefore you are expected to come up with reasons that account for the differences in the results - so some understanding of the comparator's particular products and markets, its plans and any of its strengths or weaknesses may be helpful for you even though you are not required to perform a formal SWOT for it (usually the PEST with be fairly similar for both companies).
Thank you so much Trephena. I can Proceed confidently now
Dear All,
Please anyone help me out to choose competitor companies for Topic 8 - 50206060 Transportation Services companies that manage Ports.
I want to choose DPW (Dubai Port World) and PSA (or APM Terminals parent). My question is this can i compare these two companies F/S, as both are based in different countries and having F/S in different currencies?
Your advice will be highly appreciated.
Many Thanks,
ABUBAKER
@gillianm said: The simple answer is that unless the motor cycle operations are run and reported as a separate company you will not be able to do this. If the financial statements include cars and motor cycles you have no option but to use the financial statements that cover the whole company or choose different companies or a different industry sector.I am doing the rap with my organisation as Netflix. My issue is that almost all its main competitors such as Hulu, Amazon Prime Video are subsidiaries of large public companies and so it is nigh on impossible to find stand alone data for the rival companies Viacom is sorely in media entertainment and has available financials and metrics but it is so much smaller in terms of market cap and revenues.Its business model is also slightly different as it delivers the content primarily through traditional linear TV . my question is how much of an issue is it if you leave out the obvious competitor ( for lack of information) and use a company that is in a different space such as Viacom.Or Would i rather use Disney even though it has investments in such thing as theme parks that are not necessarily media entertainment
Unfortunately mackawara you have hit on one of the major issues for Topic 8 - what with IFRS & GAAP, groups and their subsidiaries and organisations operating in different countries with different currencies it becomes a major problem finding a suitable comparator -and doing a meaningful comparison. Though the latter should put strategies at the heart of the evaluation and their impact on financial performance rather than just simply commenting on the trends in ratios.
I make no secret of my loathing for this topic anyway but I do sympathise. There is no easy way round it I can see apart from choosing a different topic -not much help I realise for Topic 8 devotees but something I would suggest for those embarking on P40.
Hello GillianM,
I just failed in period 38 and want to resubmit in p39. I have failed in spreadsheet as I did not show application of formula in cells. Actually I didn't notice it while doing my rap. Rest I passed. So my question do I need to only improve that section as per marker feedback or I need to do some more works in my rr and sls. I worked with topic 20. Took 5 years annual reports of the company till 2018 year ended march 31st. CSR Scandal occurred in 2015. So do I need to update annual report till 2019 for topic 20 as well? As I know for topic 8 and topic 15 I need current 3 years report but for topic 20 I couldn't find anything else. Pls advice...
Just do exactly what it says in the feedback and you should be OK.
Unless something else significant has happened in respect of the company's CSR since you submitted then nothing needs to be updated. For example if you had been doing Boeing the fact that the company was initially poor to respond to the 737MAX incidents and has suffered reputational damage and a severe decline in consumer confidence, I would have expected a student to have at least mentioned this change of circumstances in a couple of paragraphs when resubmitting.
Thank you for your quick reply. My company is Toshiba corporation and they did accounting scandal in 2015. Nothing major happened since then. In that case hopefully I don't need to update to current year then. Thank you for ur advice.
Dear @GillianM
As i'm submitting my RAP (topic 8) for period 39, i just wanted to confirm that do we need to provide references for the the formulas used in the excel sheet?
secondly, i have confusion related to 2 points in the information pack, page 17 (4.d) how to submit your RAP.
*files to submit.
point 3 = Any financial statements can be uploaded as pdf documents in the appendices.
point 5 = At least one excel spreadsheet. if you have other spreadsheet files they can be uploaded as general appendices...
point 3, which financial statements shall be included the one we has used for ratio analysis or we have to submit the whole annual report (as it contains financial statements)?
point 5, as already mentioned, do we need to provide reference that from where we have used the formulas?
Thank you for your time.
Hi @GillianM
As OBU requires to submit all the appendix files separately.
I have confusion that Do I need to include the appendix at the end of the main Research Report also or just the separate files?
Can you please shed some light on this.
Hi if i need to work with you on my RPA how can i? do you provide online sessions and what is your fee? thanks
Sign into reply to this topic.