Part 1: Read paragraph OB11 of Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting: Chapter 1, The Objective of General Purpose Financial Reporting, and Chapter 3, Qualitative Characteristics of Useful Financial Information. What does FASB say about the degree to which the balance sheet is made up of estimates, as opposed to exact depictions of the underlying economic position of the entity? Part 2: The disclosures related to critical accounting estimates and judgments were previously seen in Exhibit 3.2 for Telefon a ktiebola get LM Ericsson (Ericsson). The balance sheets are presented below and on the following page. Focusing on Ericsson€™s assets, do you agree with the FASB€™s assessment about the degree to which the balance sheet is made up of estimates? Explain your answer.

As of January 1,2013 the provision for the Swedish special payroll taxes, amounting to SEK 1.8 billion, which was previously included in other current liabilities, has been re-classified as pension liability in line with the implementation of lAS 19R.

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TELEFONAKTIEBOLAGET LM ERICSSON DECEMBER 31, 2013 CONSOLIDATED BALANCE SHEET December 31, SEK million Notes 2013 2012 Assets Non-current assets Intangible assets C10 Capitalized development expenses Goodwill Intellectual property rights, brands and other SEK 3,348 31,544 12,815 SEK 3,840 30,404 15,202 intangible assets Property, plant and equipment C11, C26, C27 11.433 11,493 Financial assets Equity in jcint ventures and associated companies Other investments in shares and participations Customer finance receivables, non-current Other financial assets, non-current C12 C12 C12 C12 C8 2,569 505 1,294 5,684 ,100 SEK 78,294 2,842 386 1,290 3,964 12.321 SEK 81,742 Deferred tax assets continued) December 31, SEK million Notes 2013 2012 Current assets Inventories Trade receivables Customer finance receivables, current Other current receivables Short-tem investments Cash and cash equivalents C13 C14 C14 C15 C20 C25 SEK 22,759 SEK 28,802 63,660 4.019 20,065 32,026 44,692 193,254 SEK 269,10 SEK 274,996 71,013 2,094 17941 34,994 42,095 190,896 Total assets Equity and liabilities Equity Stockholders' equity Non-controlling interest in equity of subsidiaries C16 SEK 140,204 1.419 SEK 141,623 SEK 136,883 1,600 SEK 138,483 Non-current liabilities Post-employment benefits Provisions, non-current Deferred tax liabilities Borrowings, non-current Other non-current liabilities C17 C18 се C19, C20 SEK 9,825 2,650 22,067 1,459 SEK 36,223 SEK 9,503 211 3,120 23,898 2,377 SEK 39,109 Current liabilities Provisions, current Borrowings, current Trade payables Other current liabilities C18 SEK 5,14 SEK 8,427 4.769 23,100 61,108 97404 SEK 269,190 SEK 274,996 C19, C20 C22 C21 7,389 20,502 58,314 91,344 Total equity and liabilities