A large bank loan is due next year, but in order to show increased liquidity, he has insisted on classifying it as a non-current liability because he believed the bank would be willing to extend the term of theloan.

He doubled the useful life estimates of almost all his property, plant and equipment items,

arguing that the original useful lives were not representative of the assets' usage patterns. He did not provide any information on how much reduction in depreciation expense re sulted from this action.

Requirements

Examine James' actions in relation to the presentation requirements for financial statements. How do you think readers of the financial statements would react if they came to know of James' actions?