Assume that you are a graduate accountant working for Highend Accountants, a public accounting firm located at 203 York Street Sydney, NSW 2000. The manager of your firm, Mr. John Little asked you to draft a letter in response to an email received from Ms. Michelle Smith, the managing director of Lowsales Ltd in response to various key accounting issues. See the copy of the email on the next page.

You should address all the technical issues/discussion in the letter, followed by a Reference List.

• develop information gathering and communication strategies to enable the provision of professional advice to a

  client

The accountant raised a third point. He recommended that Lowsales Ltd adopt the revaluation method for property, plant and equipment instead of our current cost method. Can you explain what is the difference between the cost method and the revaluation method? I am also not sure how this affects our financial statements. Could you please explain how this may impact our financial statements? Our board thinks that the revaluation method is better as we can increase company asset values anytime and therefore it will attract more new investors. Is this correct?