EXHIBIT III LIST OF CONCERNS PREPARED BY JAMIE PHILLIPS (INCLUDING EXCERPTS FROM AUDIT WORKING PAPERS) Inventory The audit working papers include the following (in $000's): Summary of Writedowns June 10, 2021 Net August 31, 2020 Net Realizable Value Realizable Value Write- down Write- down Cost Cost $ 1,752 $ 1,730 $ 22 $ 898 $ 808 $ 90 Category Snowmobiles (stock and customized) Winter parts and accessories Subtotal 774 900 458 530 2,526 2,630 22 1,356 1.338 90 840 772 68 998 948 50 Jet skis Motorboats 956 932 24 1,078 1,062 16 Canoes and kayaks 526 650 560 690 Summer parts and Jaccessories 252 202 50 404 360 44 Subtotal 2,574 2.556 142 3,040 3,060 110 Total $ 5,100 $ 5,186 $ 164 $ 4,396 $ 4,398 $ 200 Days' sales in inventory 60 days 63 days FS applied the lower of cost and net realizable value, accordance with its accounting policy. I do not agree with the method used. IFRS requires representational faithfulness, and using net realizable value less normal profit margin is more representative of cost and would ensure historic profit margins are maintained. A further writedown of the inventory and a reduction in purchase price are necessary. 3. The relevant accounting issues: Discuss the relevant IFRS recognition and measurement requirements for the specific accounting issues noted in the case, applying the related case facts Consider the users' motivations and potential biases Conclude on the appropriate accounting treatment based on your analysis . EXHIBIT III LIST OF CONCERNS PREPARED BY JAMIE PHILLIPS (INCLUDING EXCERPTS FROM AUDIT WORKING PAPERS) Inventory The audit working papers include the following (in $000's): Summary of Writedowns June 10, 2021 Net August 31, 2020 Net Realizable Value Realizable Value Write- down Write- down Cost Cost $ 1,752 $ 1,730 $ 22 $ 898 $ 808 $ 90 Category Snowmobiles (stock and customized) Winter parts and accessories Subtotal 774 900 458 530 2,526 2,630 22 1,356 1.338 90 840 772 68 998 948 50 Jet skis Motorboats 956 932 24 1,078 1,062 16 Canoes and kayaks 526 650 560 690 Summer parts and Jaccessories 252 202 50 404 360 44 Subtotal 2,574 2.556 142 3,040 3,060 110 Total $ 5,100 $ 5,186 $ 164 $ 4,396 $ 4,398 $ 200 Days' sales in inventory 60 days 63 days FS applied the lower of cost and net realizable value, accordance with its accounting policy. I do not agree with the method used. IFRS requires representational faithfulness, and using net realizable value less normal profit margin is more representative of cost and would ensure historic profit margins are maintained. A further writedown of the inventory and a reduction in purchase price are necessary. 3. The relevant accounting issues: Discuss the relevant IFRS recognition and measurement requirements for the specific accounting issues noted in the case, applying the related case facts Consider the users' motivations and potential biases Conclude on the appropriate accounting treatment based on your analysis