Shown below is the balance sheet of the Ironside Co. at 31 December 19X 1 after its first year of operation as a producer of aero-engines. The columns A and B represent alternative balance-sheet figures. Both A and B are calculated using generally accepted accounting principles.

A B Fixed Assets £OOOs £OOOs £OOOs £OOOs Research and development 30 Land 50 40 Machinery 60 50 Vehicles 15 10 155 100 Current Assets Raw materials 20 18 Work in progress 33 20 Finished goods 15 12 Debtors 22 20 Cash 30 30 120 100 Current Liabilities Creditors 15 20 Net Current Assets 105 80

£260 £180

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Financed by:
Owners' Equity Ordinary Shares profit Loss Review qf value and profit 200 60 £260 -= 200 20 £180 157 Give an explanation of how the difference in the figures in A and B might have arisen. Can both give a true and fair view of the company's position?