Goal Products Limited (GPL) is the official manufacturer and distributor of soccer balls for North American League Soccer (NALS), a professional soccer association. GPL is a private company. It has always prepared its financial statements in accordance with ASPE.

It is now October 20, Year 9. You, CPA, were recently hired as the manager of financial reporting for GPL. In your first week you must review the first draft of the quarterly financial statements and provide comments to the financial reporting team on any issues you note. As you start your review you receive an email from the chief financial officer, Joey Bonaducci (Exhibit II).

The quarterly financial statements, for the period ended September 30, Year 9, are still being finalized. So far you have received the balance sheet, statement of net income, and most of the planned note disclosures (Exhibit III) that will be provided to GPL’s major lenders. You have received, as well, an internally prepared highlights summary (Exhibit IV) that will also be provided to GPL’s major lenders. The statements of retained earnings and cash flows and the disclosures of changes in accounting policies are still being finalized.

Exhibit II