The company has a note receivable of 150,000 that has accidentally been classified as a current asset but should have been classified as a long term-asset. This would mean a reclassification. During an audit of the company, the engagement team concluded a waiver of this reclassification is appropriate. Is this accurate? why or why not? how does this misstatement affect the company?

\begin{tabular}{|l|r|} \hline Cash & 50,000 \\ \hline Accounts receivable & 750,000 \\ \hline Inventory & 25,000 \\ \hline Prepaid insurance & 31,000 \\ \hline Note receivable subcontractor & 150,000 \\ \hline Contract assets & 650,000 \\ \hline Total current assets & 1,656,000 \\ \hline & \\ \hline Accounts payable & 550,000 \\ \hline Other accrued liabilities & 20,000 \\ \hline Contract liabilities & 58,000 \\ \hline Line of credit bank & 200,000 \\ \hline & \\ \hline Total liabilities & 828,000 \\ \hline \end{tabular}