Case: 11-5: Venus Cellular

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Case 11-5 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 Copyright 2010 Deloitte Development LLC All Rights Reserved. Case 11-5c: Venus Cellular Page 2 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. Copyright 2010 Deloitte Development LLC All Rights Reserved.