not too sure how to do case 2, 3
Case 2(7 Marks): Siemens AG: Identifying differences and similarities between IFRS and GAAP (LO 10-11) Presented below are excerpts from the 2018 annual report of Siemens AG, a German company that operates in numerous industries, including technology, power generation, and medical diagnostics. Case 3(9 Marks): NOTE 1 Basis of presentation Walla Corporation's International Division consists of two of Walla's subsidiaries. One of the Inventories-Inventories are valued at the lower of acquisition or production costs and net realizable subsidiaries operates in the United Kingdom and the other on the European continent. The U.K. value, costs being generally determined on the basis of an average or first-in, first-out method. subsidiary had identical sales revenue amounts, as measured in British pounds, in 20X1 and 20X2 NOTE 11 Inventories and reported a 25% gross profit margin in both years. Similarly, the European subsidiary's sales revenue was the same in 20X1 and 20X2 when measured in euros. It reported a 33.33% gross profit NOTE 11 Inventories margin in both years. Both subsidiaries account for their inventories under FIFO. Assume the British pound was rising steadily in value versus the U.S. dollar throughout 20X1 and 20X2. Assume the euro was declining steadily in value versus the U.S. dollar throughout 20X1 and 20X2. Sep 30, (In millions of E) 2018 2017 Raw materials and supplies 3,165 2,955 Required: Work in progress 6,085 6,169 Finished goods and products held for resale 3,871 3,972 Advances to suppliers 763 790 1, If Walla uses the current rate method to translate the British subsidiary's financial statements into 13,885 13,885 U.S. dollars, how is the British subsidiary's 20X2 gross margin percentage, based on its U.S. dollar financial statements, most likely to compare to its gross margin percentage based on the 20X2 British pound financial statements? Explain. (3 Marks) 2, If Walla uses the temporal method to translate the British subsidiary's financial statements into U.S. dollars, how is the British subsidiary's 20X2 gross margin percentage, based on its U.S. dollar Cost of sales includes inventories recognized as expense amounting to E57,029 million and E57,176 financial statements, most likely to compare to its gross margin percentage based on the 20X2 million, respectively, in fiscal 2018 and 2017. Compared to prior year, write-downs increased British pound financial statements? Explain. (3 Marks) (decreased) by E(19) million and E15 million as of September 30, 2018 and 2017. 3, If Walla uses the current rate method to translate both subsidiaries' financial statements into U.S. Source: Siemens AG 2018 annual report. dollars, how is the gross margin percentage for the International Division in 20X2 most likely to Required: compare to the gross margin percentage of the International Division in 20X1? Explain. (3 Marks) 1, Using the Siemens AG note as an example, identify the similarities and differences between U.S. GAAP and IFRS regarding inventory accounting. (7 Marks)
