Page 14 - MCS August Day 1 Tasks

CIMA AUGUST 2018 – MANAGEMENT CASE STUDY

done, for example, by compromising staff salaries or benefits then future quality will be put at
risk.

Future investments

With some of their main markets declining, there is a risk that Montel doesn’t have enough
potential projects lined up to generate replacement revenue and profit for the business being
lost.

Potential conflict

There could be potential conflict or lack of goal congruence between the four factories. Transfer
pricing issues may arise between, for example, the lens makers in Eastown and the bridge and
compact camera makers in Southtown. Cost reduction techniques appropriate for the lens
makers in Eastown may not be appropriate for the professional lens makers in Northtown.

From an F2 perspective:

Each of the following financial reporting standards* / topics may be relevant to Montel:

 IAS 2 Inventories
 IAS 8 Accounting policies, changes in accounting estimates and errors
 IAS 16 Property, plant and equipment
 IAS 36 Impairment of assets
 IAS 38 Intangible assets
 IAS 17 Leases
 IAS 18 Revenue
 IAS 20 Government grants and disclosure of government assistance
 IAS 37 Provisions, contingent liabilities and contingent assets
 IAS 21 Foreign currency – both foreign currency transactions and foreign operations
 IFRS 5 Assets held for sale and discontinued operations
 IFRS 8 Operating segments
 IFRS 3 Business combinations
 IFRS 10 Consolidated financial statements
 IFRS 11 Joint arrangements

10 KAPLAN PUBLISHING