The answers presented in narrative form below provide the basis for the figures presented in the summary of changes to management's estimates and proposed statement of comprehensive income and operating assets. Students will likely differ in their judgments and estimates. These differences will impact the results they determine for the case. We believe these differences are important and worthy of class discussion as they highlight why knowledgeable individuals may come to different financial statement conclusions when provided with the same set of financial data.

The case materials indicate that management believes the fair values provide a better indication of the possible market value of the assets. As outside investors are interested in Portable Power, it is likely they would be interested in these fair values, regardless of whether management included them in the financial statements. Students should have observed that management was not fully informed as to either the IAS...

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