Analysis of the accounting issues. OTE reports its financial statements in accordance with IFRS:

Accounting issues

1. Manufacturing equipment with a useful life of 10 years was purchased from a U.S. supplier for US$200,000 in November. At the time, the exchange rate in effect was US$1 = C$1.22 and the equipment and associated payable were recorded at $244,000. At year end, the payable was still outstanding and both it and the equipment were still recorded at $244,000.The year-end exchange rate was US$1 = C$1.32. Misty is not sure if either the initial or year-end amounts were recorded correctly.

2. In June, the exclusive rights to a customer list were acquired for $75,000 from a competitor. The price paid for the customer list was based on a valuation prepared by a Chartered Business Valuator. This amount was expensed in the financial statements consistent with the treatment for costs incurred to internally generate OTE's customer list.