Series: MARCH 2025

Search 500 + past questions and counting.

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

Question

Below are IPSAS-compliant financial statements of two developing countries, Borga and Obi Manso for the year ended 31 December 2023 expressed in the local currency of Ghana and published by an international public financial management organization domiciled in Accra, Ghana.

Statement of Financial Performance for the Year ended 31 December 2024

	Borga	Obi Manso
	GH¢ million	GH¢ million
Revenue
Tax Revenue	302,400	317,300
Non Tax Revenue	50,400	76,000
Grants and Donations	10,440	5,985
	363,240	399,285
Expenditure
Employee compensation	190,512	161,880
Goods and Services	41,208	50,350
Consumption of Fixed Assets	4,680	8,550
Interest	77,880	76,000
Social Benefits	8,160	17,100
Subsidies	–	4,275
Other Expenses	4,800	9,880
	327,240	328,035
Surplus	36,000	71,250

Statement of Financial Position as at 31 December 2024

	Borga	Obi Manso
	GH¢ million	GH¢ million
Assets
Non-Current Assets
Property, Plant and Equipment	96,000	180,500
Equity Investments	42,000	33,250
Loans Receivables	4,800	2,850
	142,800	216,600
Current Assets
Loan Receivables	33,600	37,050
Inventory	4,800	11,400
Cash and Cash Equivalent	57,600	30,400
	96,000	78,850
Total Assets	238,800	295,450
Funds and Liabilities
Current Liabilities
Payables	36,000	40,850
Deposits and Trust Monies	58,800	57,000
	94,800	97,850
Non-Current Liabilities
Domestic Debt	24,000	38,000
External Debt	50,400	85,500
	74,400	123,500
	169,200	221,350
Accumulated Funds	69,600	74,100
Funds and Liabilities	238,800	295,450

Required: a) Prepare a paper for presentation at an upcoming PFM forum to evaluate the performance of the two countries using the following metrics: i) Revenue to Total Assets ii) Current Ratio iii) Debt to Owners Fund iv) Accumulated Fund to Total Assets v) Common Size analyses of Tax Revenue, Compensation of Employees and Surplus

b) Using the metrics above, interpret the performance of the two countries under efficiency, short-term liquidity and long-term liquidity/stability of the countries with a metric each.

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

Topic: Financial Statements Discussion and Analysis
Series: MARCH 2025

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

Question

a) The Government has unveiled its transformative agenda, driven by its fiscal strategy, covering the period 2025 -2028. In the Agenda 2028 document released by the government, the following strategies were outlined:

Taxes on individual income (referred to as pay-as-you-earn) will be suspended until 2029.
Development will be driven by debt, with the government leveraging its goodwill to borrow from development partners and investors to fund its development programmers and projects. By the end of 2024, the debt-to-GDP ratio was projected to reach 80%.
There will be significant government expenditure aimed at boosting development and enhancing citizens’ living conditions. Data from 2024 indicate that the fiscal balance relative to GDP stands at 17%.
All forms of extravagance and wastefulness within the public sector will be eradicated to ensure efficiency, effectiveness, and value for money across all government operations.
The statement also noted that the government reserves the right to suspend the fiscal rules and targets as and when necessary.

Required:
i) Examine the implications of the government’s policy propositions (1 to 4) in relation to the principles of formulating and implementing fiscal policy objectives outlined in the Public Financial Management Act 2016, (Act 921).

ii) Discuss the steps and events that will necessitate a cabinet approval for a suspension of the fiscal rules and targets under the Public Financial Management Act 2016, (Act 921).

b) The Public Expenditure and Financial Accountability (PEFA) Framework is designed to evaluate the public financial management performance of public institutions. However, some critics, including the Director of Finance of your entity, argue that PEFA represents a form of neo-colonialism repackaged for Africa, and therefore, African countries should resist its assessment.

Required:
i) Explain to the Director of Finance FOUR reasons your country’s PFM system should be subjected to PEFA assessment.

ii) Discuss FOUR limitations of the PEFA framework used to assess PFM systems.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Debt Management, Efficiency, Fiscal Policy, Government Expenditure, PFM Act, Public Financial Management, Tax suspension
Level: Level 2

Topic: Public expenditure and financial accountability framework
Series: MARCH 2025

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

Question

Ghana Highway Authority prepares its financial statements in accordance with International Public Sector Accounting Standards (IPSAS). The Government of Ghana has approved the sum of GH¢678,000 to the Ghana Highway Authority for the construction of a qualifying infrastructural asset.
The following costs were incurred during the construction of the Asset:
i) The sector minister in the process recommended his brother as a consultant to conduct feasibility analysis on the construction of the asset. The consultant charged the Authority the sum of GH¢350,000.
ii) An installation of platforms to enable the project to be undertaken were designed and built at a cost of GH¢225,900.
iii) Some foreign elements of the service required that Letter of Credit was processed to enable execution of the project, and the legal fees charged was GH¢275,000.
iv) Importation of specific components from Germany to execute the project in question cost the Authority €58,890.
v) Haulage and Freight charges cost €5,725.
vi) Cleaning and engine oil for first testing of equipment at the project site amounted to GH¢19,430.
vii) The cost of warranty on the asset was €3,400 should the Authority take advantage of the warranty agreement.
viii) Delivery, handling and other overhead amounted to GH¢156,800 out of which 60% were attributable.
ix) The Ghana Highway Authority consequently incurred cost of GH¢398,560 in modification of an adjoining infrastructure to facilitate the project.
The Government of Ghana was not able to provide all the amount hence the Minister for Finance gave approval to the Chief Executive Officer (CEO) of the Authority to borrow the excess amount from open market which a financial institution provided at a commercial rate of 35% per annum. Government of Ghana (GoG) accounting policy adopts the allowed alternative approach of borrowing costs under IPSAS 5: Borrowing Costs.
A check from the professional website of the Institute of Architects and Engineers in Ghana indicates that the professional fee that can be charged under the service rendered by the consultant would cost only GH¢195,000.
To the extent that the funds borrowed was not GoG funds, and the fact that the funds would be required after 100 days to pay for the cost of the asset, which was provided earlier than envisaged, the CEO took advantage of the 14 weeks’ grace period for payment and invested the funds in a 91-day investment which yielded a return of 24.09% per annum at first maturity when the funds were held in anticipation of payment.
The prevailing exchange rate on the date of the contract was GH¢13.50 to €1.00, however on the day of payment the exchange rate shot up to GH¢15.57 to €1.00.

Required:
a) Explain what is meant by a qualifying asset.

b) Determine the cost of the qualifying asset for capitalization.

c) Based on the information provided, indicate FIVE notes to the accounts in the books of the Ghana Highway Authority.

d) Explain another method or approach by which the borrowing cost could be recognized under IPSAS 5: Borrowing Costs.

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

Question

The Trial Balance below relates to Hamile Teaching Hospital, a public hospital.

Trial Balance for the year ended 31 December 2023
	Debit	Credit
	GHc’000	GHc’000
Government subvention		100,750
Out-patient services fees		35,000
In-patient services fees		40,000
Development Partner grants (ii)		16,000
Established position salaries	62,000
Casual Labour	5,600
Contract appointment (local and foreign)	1,400
Limited engagements	200
Rent (iii)	500	150
Insurance	340
Consultancy services	120
Conferences, workshops and training	4,500
Purchase of drugs	60,000
Purchase of medical consumables	80,000
Office expenses	20,000
Repairs and maintenance	6,000
Interest on loan	10,000
Pharmacy sales		180,000
Diagnostic		85,000
Mortuary Services		9,400
Cafeteria and Canteen		4,650
Extension services		14,500
Furniture and office equipment (iv)	200,000	40,000
Medical equipment & accessories (iv & v)	420,000	120,000
Motor vehicles (iv)	120,000	20,000
Land and buildings (iv)	300,000	70,000
Bank and Cash	30,000
Receivable from National Health Insurance Scheme (vi)	65,000
Receivable from patients	15,000
Payables		26,000
Loan from foreign Institution (2028) (vii)		350,000
Inventory of drugs	22,000
Inventory of medical consumables	12,000
Accumulated Fund		336,210
Other expenses	13,000
	1,447,660	1,447,660

Additional Information:
i) The hospital prepares its financial statements in accordance with the International Public Sector Accounting Standards (IPSAS), the Public Financial Management Act 2016, (Act 921), the Public Financial Management Regulation 2019, L.I 2378, and the current Chart of Accounts of the Government of Ghana.
ii) The Development Partner grants received from the Health Care Fund, an international organization that provides free medical care to the rural poor and vulnerable individuals, are typically unconditional. However, 40% of this year’s grant is subject to certain conditions, which had not been met as of December 31, 2023.
iii) Rent received in advance during the year amounted to GH¢20,000 while rent owed by the hospital for the year amounts to GH¢300,000.
iv) The hospital charges consumption of fixed assets on straight line basis as follows

Non-current Assets	Estimated Useful Life
Furniture and office equipment	5 years
Medical equipment and accessories	4 years
Motor vehicles	5 years
Buildings	10 years

Land constitutes 30% of the amount of land and building shown in the trial balance.
v) A medical equipment valued at GH¢20,000,000 which is included in the medical equipment and accessories listed on the trial balance, was completely damaged due to consistent power fluctuations. The value of this equipment should be written off.
vi) The hospital submitted a claim of GH¢11,000,000 to the National Health Insurance Scheme for services provided to patients in the last quarter of 2023, but the payment has not yet been received. This transaction has not yet been reflected in the trial balance.
vii) The hospital took a loan of $100,000,000 from Health World Bank on January 1, 2023, when the exchange rate was $1 to GH¢3.50. The exchange rate on 31 December 2023 is $1 to GH¢5.
viii) The inventories on 31 December 2023 were as follows:

Inventory type	Cost	Net Realizable Value	Current Replacement
	GHc’000	GHc’000	GHc’000
Drugs	15,000	16,000	14,000
Medical consumables	10,000	11,000	9,000

Required:
Prepare for Hamile Teaching Hospital:
a) Statement of Financial Performance for the year ended 31 December 2023.

b) Statement of Financial Position as of 31 December 2023.

c) Disclosure notes to the financial statements.

Answer

Find Related Questions by Tags, levels, etc.

Topic: Preparation and presentation of financial statements for covered entities
Series: MARCH 2025

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

Question

Statement of Financial Performance for the Year ended 31 December 2024

	Borga	Obi Manso
	GH¢ million	GH¢ million
Revenue
Tax Revenue	302,400	317,300
Non Tax Revenue	50,400	76,000
Grants and Donations	10,440	5,985
	363,240	399,285
Expenditure
Employee compensation	190,512	161,880
Goods and Services	41,208	50,350
Consumption of Fixed Assets	4,680	8,550
Interest	77,880	76,000
Social Benefits	8,160	17,100
Subsidies	–	4,275
Other Expenses	4,800	9,880
	327,240	328,035
Surplus	36,000	71,250

Statement of Financial Position as at 31 December 2024

	Borga	Obi Manso
	GH¢ million	GH¢ million
Assets
Non-Current Assets
Property, Plant and Equipment	96,000	180,500
Equity Investments	42,000	33,250
Loans Receivables	4,800	2,850
	142,800	216,600
Current Assets
Loan Receivables	33,600	37,050
Inventory	4,800	11,400
Cash and Cash Equivalent	57,600	30,400
	96,000	78,850
Total Assets	238,800	295,450
Funds and Liabilities
Current Liabilities
Payables	36,000	40,850
Deposits and Trust Monies	58,800	57,000
	94,800	97,850
Non-Current Liabilities
Domestic Debt	24,000	38,000
External Debt	50,400	85,500
	74,400	123,500
	169,200	221,350
Accumulated Funds	69,600	74,100
Funds and Liabilities	238,800	295,450

b) Using the metrics above, interpret the performance of the two countries under efficiency, short-term liquidity and long-term liquidity/stability of the countries with a metric each.

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

Topic: Financial Statements Discussion and Analysis
Series: MARCH 2025

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

Question

Taxes on individual income (referred to as pay-as-you-earn) will be suspended until 2029.
Development will be driven by debt, with the government leveraging its goodwill to borrow from development partners and investors to fund its development programmers and projects. By the end of 2024, the debt-to-GDP ratio was projected to reach 80%.
There will be significant government expenditure aimed at boosting development and enhancing citizens’ living conditions. Data from 2024 indicate that the fiscal balance relative to GDP stands at 17%.
All forms of extravagance and wastefulness within the public sector will be eradicated to ensure efficiency, effectiveness, and value for money across all government operations.
The statement also noted that the government reserves the right to suspend the fiscal rules and targets as and when necessary.

ii) Discuss the steps and events that will necessitate a cabinet approval for a suspension of the fiscal rules and targets under the Public Financial Management Act 2016, (Act 921).

Required:
i) Explain to the Director of Finance FOUR reasons your country’s PFM system should be subjected to PEFA assessment.

ii) Discuss FOUR limitations of the PEFA framework used to assess PFM systems.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Debt Management, Efficiency, Fiscal Policy, Government Expenditure, PFM Act, Public Financial Management, Tax suspension
Level: Level 2

Topic: Public expenditure and financial accountability framework
Series: MARCH 2025

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

Question

Required:
a) Explain what is meant by a qualifying asset.

b) Determine the cost of the qualifying asset for capitalization.

c) Based on the information provided, indicate FIVE notes to the accounts in the books of the Ghana Highway Authority.

d) Explain another method or approach by which the borrowing cost could be recognized under IPSAS 5: Borrowing Costs.

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

Question

The Trial Balance below relates to Hamile Teaching Hospital, a public hospital.

Trial Balance for the year ended 31 December 2023
	Debit	Credit
	GHc’000	GHc’000
Government subvention		100,750
Out-patient services fees		35,000
In-patient services fees		40,000
Development Partner grants (ii)		16,000
Established position salaries	62,000
Casual Labour	5,600
Contract appointment (local and foreign)	1,400
Limited engagements	200
Rent (iii)	500	150
Insurance	340
Consultancy services	120
Conferences, workshops and training	4,500
Purchase of drugs	60,000
Purchase of medical consumables	80,000
Office expenses	20,000
Repairs and maintenance	6,000
Interest on loan	10,000
Pharmacy sales		180,000
Diagnostic		85,000
Mortuary Services		9,400
Cafeteria and Canteen		4,650
Extension services		14,500
Furniture and office equipment (iv)	200,000	40,000
Medical equipment & accessories (iv & v)	420,000	120,000
Motor vehicles (iv)	120,000	20,000
Land and buildings (iv)	300,000	70,000
Bank and Cash	30,000
Receivable from National Health Insurance Scheme (vi)	65,000
Receivable from patients	15,000
Payables		26,000
Loan from foreign Institution (2028) (vii)		350,000
Inventory of drugs	22,000
Inventory of medical consumables	12,000
Accumulated Fund		336,210
Other expenses	13,000
	1,447,660	1,447,660

Non-current Assets	Estimated Useful Life
Furniture and office equipment	5 years
Medical equipment and accessories	4 years
Motor vehicles	5 years
Buildings	10 years

Inventory type	Cost	Net Realizable Value	Current Replacement
	GHc’000	GHc’000	GHc’000
Drugs	15,000	16,000	14,000
Medical consumables	10,000	11,000	9,000

Required:
Prepare for Hamile Teaching Hospital:
a) Statement of Financial Performance for the year ended 31 December 2023.

b) Statement of Financial Position as of 31 December 2023.

c) Disclosure notes to the financial statements.

Answer

Find Related Questions by Tags, levels, etc.

Topic: Preparation and presentation of financial statements for covered entities
Series: MARCH 2025

Series: MARCH 2025

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

Our offerings

Contact Info

Customer

Get In Touch

Series: MARCH 2025

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis"

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting"

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards"

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities"

PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis

Prepare a paper evaluating Borga and Obi Manso’s 2023 financial performance using specified metrics.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q4 – Financial statements discussion and analysis"

PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting

Examine implications of Ghana's 2025-2028 fiscal policy proposals per PFM Act 2016.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q3- Public sector fiscal planning and budgeting"

PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards

Explain the meaning of a qualifying asset per IPSAS for Ghana Highway Authority.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q2 – International public sector accounting standards"

PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities

Prepare the Statement of Financial Performance for Hamile Teaching Hospital for 2023 per IPSAS and related regulations.

You're reporting an error for "PSAF – Mar 2025 – L2 – Q1- Preparation and presentation of financial statements for covered entities"

Our offerings

Contact Info

Customer

Get In Touch

admin