Discuss two (2) advantages of global harmonizing of accounting standards. Has there been any recent success with regards to the harmonizing of accounting standards? Provide details. (10 marks) B. Switzerland is not a member of the European Union (EU). You are the Business Development Officer (BDO) of a successful medium-size Swiss company that has grown rapidly in recent years. The company has now grown to the point where the owners can no longer supply all the capital needed for further expansion. The owners have asked you to look into the option of the company raising capital in the EU capital markets. You have commenced discussion with banks and investors in Paris, Zurich and Frankfurt. You have spoken with several investment bankers about the possibility of an Initial Public Offering (IPO) on the Euronext. Currently your company prepares its financial statements in conformity with Swiss GAAP. Swiss law allows for the use of IFRS instead of Swiss GAAP. The owners of the company have been reluctant to switch to IFRS because of the cost involved to make such a change. Present a compelling case to the owners of the company in favour of switching to IFRS. (5 marks) Question 2 A. Provide the history, overview and objective of the standard that provides guidance on the measurement and recognition of inventory. (3 marks) B. What guidance does this standard provide on the cost methods and formulas to be used to cost inventory? (5 marks) C. Read the opening case in Chapter 7 of your course text captioned ‘Too Much Inventory’. Citing from the relevant standard, explain why BB Ltd had to undertake massive write-downs in 2014. (5 marks). SEE the attached for Case. D. Based solely on the data given in the opening case, prepare the typical journal entry BB Ltd would probably have made to record its write-downs in 2014.
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