Leopard Corporation is currently preparing its annual financial statements for the fiscal year ended April 30, 2014, following IFRS. The company manufactures plastic, glass, and paper containers for sale to food and drink manufacturers and distributors. Leopard maintains separate control accounts for its raw materials, work-in-process, and finished goods inventories for each of the three types of containers. The inventories are valued at the lower of cost and net realizable value.
The company's property, plant, and equipment are classified in the following major categories: land, office buildings, furniture and fixtures, manufacturing facilities, manufacturing equipment, and leasehold improvements. All fixed assets are carried at cost. The depreciation methods that are used depend on the type of asset (its classification) and when it was acquired.
Leopard plans to present the inventory and fixed asset amounts in its April 30, 2014 statement of financial position as follows:
Inventory.....................................................................$4,814,200
Property, plant, and equipment (net of depreciation)..................$6,310,000
Instructions
(a) What information regarding inventory and property, plant, and equipment must be disclosed by Leopard Corporation in the audited financial statements issued to shareholders, either in the body or the notes, for the 2013-14 fiscal year?
(b) Leopard Corporation's controller believes that to comply with the full disclosure principle, as much information as possible should be provided in the note disclosures, including, for example, the name of the supplier that each asset was purchased from and the current location of each asset. Comment on the usefulness of these additional disclosures from the perspective of a user of the financial statements.
(CMA adapted. Used with permission)