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PAR812S-PUBLIC SECTOR FINANCIAL ACCOUNTING AND REPORTING-2ND OPP-DEC 2025 |
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n Am I BI A u n IVER s I TY
OF SCI En CE Ano TECH n OLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING & FINANCE
QUALIFICATION: BACHELOR OF ACCOUNTING (HONOURS}
QUALIFICATION CODE: 08BOAH
COURSE CODE: PAR812S
LEVEL: 8
COURSE NAME: PUBLIC SECTOR FINANCIAL
ACCOUNTING & REPORTING
SESSION: DECEMBER 2025
DURATION: 3 HOURS
PAPER: THEORY AND APPLICATION
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS: Mr. Kuhepa Tjondu
MODERATOR: Mr. Emmanuel Milijala
INSTRUCTIONS
• Th is question paper is made up of THREE (3) questions.
• Answer All the questions and in blue or black ink.
• Show all your working in the answer sheet.
• Start each question on a new page in your answer booklet and show all your workings.
• Questions relating to this paper may be raised in the initial 30 minutes after the start of
the paper. Thereafter, candidates must use their initiative to deal with any perceived error
or ambiguities and any assumption made by the candidate should be clearly stated.
PERMISSIBLE MATERIALS
Non-programmable calculator/financial calculator
THIS QUESTION PAPER CONSISTS OF 8 PAGES (Including this front page}
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QUESTION 1
[25 MARKS]
a) The Ministry of Indigenous Enterprises has been charged to collect legacy fixed
assets data and value them in accordance with International Public Sector Accounting
Standards (IPSAS). The Fixed Assets Coordinating Unit (FACU) of the Ministry has
collected for valuation the following data for your action:
The Ministry owns a four (4) storey Office Administration block. The average cost per
floor is N$4, 741 ,256.25. The building was constructed on a land size of 20 plots of
land owned by the Ministry. Currently a plot of land in that area costs N$2,500 ,000 .
The FACU has measured the sizes of the building as follows: Length at 87.5 meters,
Width 42.65 meters. FACU intends to apply a reference price per square metre of
N$4,432 to the area of the measurement in order to determine the value of the asset.
However, a professional body, the Institute of Architects and Engineers has given the
reference price for cost of such office Building at an estimated price of N$87,965,025.
The building has not seen any further face lift ever since. However, a fence wall with
a gate to enforce security and secure the land has just been completed in the current
year at a cost of N$8,970,000 with a lifespan of 50 years.
The year of construction of the office building could not be determined, yet an old
watchman who had been there for ages remembers that the building was constructed
some 42 years ago, a time when his seventh child was born . It is the decision of
Government of Namibia on adoption of IPSAS not to take advantage of the three-year
exemption period, but account for legacy fixed assets by taking 60% of the reference
cost of the legacy assets as the Deemed cost, with reduced life span to 30 years.
Required:
i) Calculate the cost of the land and buildings with structures to be brought into the
books on adoption of IPSAS and determine the depreciation chargeable in the first
year in respect of these asset.
(9 marks)
ii) Show the extract of Statement of Financial Position of the Ministry of Indigenous
Enterprises as at that date.
(3 marks)
b) You are the Director of Finance at the Namibia Water Development Authority, an
entity under the Ministry of Forestry and Water. The Authority has a five-member
Board chaired by the daughter of the Sector Minister. The Chief Executive Officer of
the Authority has just been appointed by Government for an initial term of four years.
The Chairperson of the board runs boutique services. The Authority buys a lot of
presents from this boutique whenever they are confronted with the need to give out
presents to any high-profile person . The Chairperson has made a request to the
Authority to finance her boutique services with an amount of N$546,000 to enable her
business pay some urgent bills. No terms or conditions were provided in the request.
Such an assistance from a financial institution would attract current prevailing bank
interest on loan at a rate of 35% p.a . Recently another member of the Board contracted
loan from the Bank for her child 's university entrance fees at that rate.
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Management of the Authority indicated that the amount was not significant to the
Authority and has been approved by the Head of the entity and the Chief Director. The
approved document has been handed over to you for payment. Considering the PFM
Laws and IPSAS, you engaged the Chief Director about the request, but you were
directed to go ahead and pay and use the appropriate accounting treatment in such
circumstances. You accordingly raised the necessary documentations and effected
the payment.
Required:
In relation to IPSAS 20: Related Party Disclosures:
i) Explain the implications of this transaction on the Authority and state how you would
account for this transaction in the financial statements of the entity.
(4 marks)
ii) State FOUR situations where related party transactions may lead to disclosures by
a reporting entity.
(4 marks)
iii) Explain FIVE reasons for disclosing related party transactions/relations. (5 marks)
QUESTION 2
[25 MARKS]
Namibia Wind Farms LTD, a State-Owned Enterprise (SOE), has appointed a new
Board of Directors in January 2023. The new Board after settling for a year, are
interested in assessing their performance for the year 2023 as against the
performance of the previous Board in the year 2022 through ratio analysis. Below is
the Financial Statement of Namibia Wind Farms LTD for the two years.
Namibia Wind Farms LTD
Statement of Profit or Loss for the Year Ended 31
December 2023
2023
2022
N$
N$
Revenue
9,860 ,000
6,218,000
Direct Cost
(5,905,000)
(5,822,000)
Gross Profit
3,955,000
396,000
Distribution costs
(297,000)
(264,000)
Administrative expenses
(505,000)
(455,000)
Other Income
236,000
13,000
Other gains
1,482,000
Operating Profit
3,389,000
1,172,000
Finance cost
(1 ,000,000)
(334 ,000)
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Profit before tax
expense
Tax expense
Profit after tax
2,389,000
(500,000)
1,889,000
838,000
(144,000)
694,000
Namibia Wind Farms LTD
Statement of Financial Position as at 31
December
2023
N$
N$
ASSETS
2023
2022
Non-Current Assets
Property, plant
equipment
& 17,000,000
15,000,000
Investment
5,000
2,000
Advances & loans
30,000
Total
Assets
Non-Current 17,005,000
15,032,000
Current Assets
Inventories
687,000
546,000
Trade and
receivables
other 2,829,000
1,978,000
Prepayments
87,000
42 ,000
Cash and
equivalents
cash 383,000
434,000
Total Current Assets 3,986,000
3,000,000
TOTAL ASSETS
20,991,000
18,032,000
Equity attributable to the owners
Government equity
8,000
Other
Equity
Government 613,000
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8,000
306,000
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Equity
312,000
Other components of equity:
Capital Surplus
8,471,000
Income surplus
(1,434,000)
Total Equity
7,970 ,000
Liabilities
Non-current liabilities
Deferred credit
6,692,000
Deferred tax liabilities 2,498,000
Borrowings - due after 1,297,000
one year
Total
Non-Current 10,487,000
Liabilities
Current Liabilities
Bank overdraft
166,000
Provisions for company 109,000
tax
Trade and
payables
other 1,820,000
Borrowings -due within 439,000
one year
Total
Liabilities
Current 2,534,000
Total Liabilities
13,021 ,000
TOTAL EQUITY AND 20,991,000
LIABILITIES
306,000
7,599,000
478,000
8,697,000
670,000
2,572,000
950,000
4,192,000
180,000
109,000
4,516 ,000
338,000
5,143,000
9,335,000
18,032,000
Required:
a) Compute the following ratios for 2022 and 2023 (Including the formulas
used):
i) Current Ratio
ii) Quick Ratio
iii) Inventory Turnover (Days)
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iv) Trade Receivable Collection Period (Days)
v) Trade Payables Period (Days)
vi) Working Capital Cycle
vii) Interest Cover Ratio
viii) Total Debt - Total Asset Ratio
(12 marks}
b) Based on your results in (a), write a report to the newly appointed board analysing
and indicating whether their performance is better in comparison with the old board.
(10 marks}
c) Explain THREE limitations of ratio analysis.
(3 marks}
QUESTION 3
[50 MARKS]
Below is a Trial Balance of Padja University Hospital (PUH} under the Ministry
of Health for the year ended 31 December 2023.
Cash and Bank - GRN
Cash and Bank - IGF*
Cash and Bank - Donor Funds
Undeposited Cash - IGF
Petty Cash
Investments
Debtors
Other Receivables
Withholding Tax
Trust Funds
Trade Payables
GRN Subsidy - Employee Compensation
GRN Subsidy - Goods & Services
Development Partners Proqrammes Receipt
Other Non-Operatinq Income
Medicines & Pharmaceuticals
Surgical
Medical
Investigation
OPD
Obstetrics and Gynaecoloqy
Dental
Pediatrics
Ear, Nose & Throat
Eye Care
Mortuary
Ambulance Fees
Dr
N$ 000
3,400
72,200
210,400
4,000
100
2,000
661,400
17,700
Cr
N$ 000
2,900
10,700
452,400
3,912,500
22,000
561,900
1,500
433,900
50,800
111,400
140,900
238,400
135,300
8,300
40,300
5,300
7,300
30,000
300
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(
Oohthalmoloqy
Physiotherapy
Examination Fees
Dialysis
FeedinQ
Employee Compensation - GRN
Goods & Services - GRN
Employee Compensation - IGF
Goods & Services - IGF
Capital Expenditure - IGF
Goods & Services - Partners Fund
Accumulated Fund
3,912,500
20,800
148,000
978,500
27,500
472,400
6,530,900
3,000
3,300
200
400
30,400
327,500
6,530,900
Additional Information:
* Internally Generated Funds (IGF)
i) The hospital, until the year 2023, used modified accrual accounting to prepare its
financial statements. The OAG in 2023 directed all SOE's to prepare the year 2023
financial statements in accordance with the accrual basis International Public Sector
Accounting Standards (IPSAS) .
ii) The hospital revalued its legacy assets acquired and expensed before the
year 2023 as follows:
N$000
Motor Vehicles
50,250
Buildings
120,540
Medical Equipment and other Equipment
31,500
Land
15,000
iii) Gavi, a major Development Partner supported the hospital with an amount of
N$200,000,000 for the year 2023: 20% of this amount received was meant for the
first quarter of 2024. Also, the Global Fund commitment to the hospital per the
Partnership Agreement for the year was N$250,000,000. However only
N$200,000,000 was received by the hospital.
iv) The NHP on 15 January 2024 and before the hospital forwarded the financial
statements to the Ministry, issued a report on claims submitted for payment by health
facilities for the month of October 2023 . The report revealed claims rejected
amounting to 10% of the total submission of N$100,300,000 by the hospital.
v) In line with the Public Financial Management Act, Parliament approved a write-off
of N$20,225,000 representing various hospital services provided to citizen by PUH
over the years for which payments were not received.
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vi) The capital expenditure for the year is made up of Medical Equipment
(N$19,236 ,000) and Furniture & Fittings (N$8,264,000).
vii) The GRN depreciation policy is the straight-line basis and charged as follows :
Building
5%
Motor Vehicle
20%
Medical Equipment
10%
Furniture & Fitting
25%
viii) Inventory at year end were as follows:
Cost
Medicines (for resale)
Medical Consumables (For
use on clients)
Office Consumables
N$000
146,800
29,400
19,600
Replacement
Cost
N$000
176,100
33,800
29,400
Net Realisable
Value
N$000
132,100
30,800
18,600
Required:
In compliance with IPSAS, the PFM Act and the Chart of Accounts of
Government of Nambia, prepare:
a) A Statement of Financial Performance for Padja University Hospital for the year
ended 31 December 2023.
(20 marks)
b) A Statement of Financial Position of Padja University Hospital as at 31 December
2023 .
(20 marks)
c) Explain the steps involved in Accounting for Revenue with Binding Arrangements
in accordance with IPSAS 47.
(10 marks)
(Total= 50 marks)
THE END
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