The following is an extract from the 201 I Annual Report of SIPEF NV: Auditors Report The
Question:
The following is an extract from the 201 I Annual Report of SIPEF NV:
Auditor’s Report The statutory auditor has confirmed that his audit procedures, which have been substantially completed, have revealed no material adjustments that would have to be made to the accounting information included in this press release.
With regard to the valuation of the biological assets, the statutory auditor draws the reader’s attention to the fact that, because of the inherent uncertainty associated with the valuation of the biological assets due to the volatility of the prices of the agricultural produce and the absence of a liquid market, their carrying value may differ from their realisable value.
Given the inherent uncertainty in applying IAS 41, discuss
(a) whether the pre-IAS 41 practice of value at historical cost would be preferable for the statement of financial position, and
(b) whether the new requirement to pass unrealised gains and losses through the statement of comprehensive income is more relevant to an investor.
(appendix)
Step by Step Answer:
Financial Accounting And Reporting
ISBN: 9780273778172
16th Edition
Authors: Mr Barry Elliott, Jamie Elliott