Lama Ltd, a manufacturing company, is preparing its financial statements for the year ended 30 June 2020. In preparing its statement of financial position, select an incorrect statement from the following:

a) Lama Ltd has a bank loan due in 6 months by 31 December 2020 and it has the discretion (and intention) to refinance the loan for another two years. Nevertheless, this loan should be classified as a current item.

b)Lama Ltd is required to disclose a description of the nature and purpose of each reserve item within its equity either in the statement of financial position or in the notes.

c) Lama Ltd shall classify an inventory item as current if it expects to sell the inventory in its normal operating cycle.

d)Lama Ltd should present its assets and liabilities based on current/non-current classification rather than in the order of liquidity since it has a clearly identifiable operating cycle.