Alexandra, a public limited company, designs and manages business solutions and IT infrastructures.<br>(a) In November 2010, Alexandra defaulted on an interest payment on an issued bond loan of $100 million repayable in 2015. The loan agreement stipulates that such default leads to an obligation to repay the whole of the loan immediately, including accrued interest and expenses. The bondholders, however, issued a waiver postponing the interest payment until 31 May 2011. On 17 May 2011, Alexandra felt that a further waiver was required, so requested a meeting of the bondholders and agreed a further waiver of the interest payment to 5 July 2011, when Alexandra was confident it could make the payments. Alexandra classified the loan as long-term debt in its statement of financial position at 30 April 2011 on the basis that the loan was not in default at the end of the reporting period as the bondholders had issued waivers and had not sought redemption. (6 marks)<br>(b) Alexandra enters into contracts with both customers and suppliers. The supplier solves system problems and provides new releases and updates for software. Alexandra provides maintenance services for its customers. In previous years, Alexandra recognised revenue and related costs on software maintenance contracts when the customer was invoiced, which was at the beginning of the contract period. Contracts typically run for two years.<br>During 2010, Alexandra had acquired Xavier Co, which recognised revenue, derived from a similar type of maintenance contract as Alexandra, on a straight-line basis over the term of the contract. Alexandra considered both its own and the policy of Xavier Co to comply with the requirements of IAS 18 Revenue but it decided to adopt the practice of Xavier Co for itself and the group. Alexandra concluded that the two recognition methods did not, in substance, represent two different accounting policies and did not, therefore, consider adoption of the new practice to be a change in policy.<br>In the year to 30 April 2011, Alexandra recognised revenue (and the related costs) on a straight-line basis over the contract term, treating this as a change in an accounting estimate. As a result, revenue and cost of sales were adjusted, reducing the year’s profits by some $6 million. (5 marks)<br>(c) Alexandra has a two-tier board structure consisting of a management and a supervisory board. Alexandra remunerates its board members as follows:<br>– Annual base salary<br>– Variable annual compensation (bonus)<br>– Share options<br>In the group financial statements, within the related parties note under IAS 24 Related Party Disclosures, Alexandra disclosed the total remuneration paid to directors and non-executive directors and a total for each of these boards. No further breakdown of the remuneration was provided.<br>The management board comprises both the executive and non-executive directors. The remuneration of the non-executive directors, however, was not included in the key management disclosures. Some members of the supervisory and management boards are of a particular nationality. Alexandra was of the opinion that in that jurisdiction, it is not acceptable to provide information about remuneration that could be traced back to individuals. Consequently, Alexandra explained that it had provided the related party information in the annual accounts in an ambiguous way to prevent users of the financial statements from tracing remuneration information back to specific individuals. (5 marks)<br>(d) Alexandra’s pension plan was accounted for as a defined benefit plan in 2010. In the year ended 30 April 2011, Alexandra changed the accounting method used for the scheme and accounted for it as a defined contribution plan, restating the comparative 2010 financial information. The effect of the restatement was significant. In the 2011 financial statements, Alexandra explained that, during the year, the arrangements underlying the retirement benefit plan had been subject to detailed review. Since the pension liabilities are fully insured and indexation of future liabilities can be limited up to and including the funds available in a special trust account set up for the plan, which is not at the disposal of Alexandra, the plan qualifies as a defined contribution plan under IAS 19 Employee Benefits rather than a defined benefit plan. Furthermore, the trust account is built up by the insurance company from the surplus yield on investments. The pension plan is an average pay plan in respect of which the entity pays insurance premiums to a third party insurance company to fund the plan. Every year 1% of the pension fund is built up and employees pay a contribution of 4% of their salary, with the employer paying the balance of the contribution. If an employee leaves Alexandra and transfers the pension to another fund, Alexandra is liable for, or is refunded the difference between the benefits the employee is entitled to and the insurance premiums paid. (7 marks)<br>Professional marks will be awarded in question 3 for clarity and quality of discussion. (2 marks)<br>Required:<br>Discuss how the above transactions should be dealt with in the financial statements of Alexandra for the year ended 30 April 2011.

Section B – TWO questions ONLY to be attempted<br>Lockfine, a public limited company, operates in the fishing industry and has recently made the transition to International Financial Reporting Standards (IFRS). Lockfine’s reporting date is 30 April 2011.<br>(a) In the IFRS opening statement of financial position at 1 May 2009, Lockfine elected to measure its fishing fleet at fair value and use that fair value as deemed cost in accordance with IFRS 1 First Time Adoption of International Financial Reporting Standards. The fair value was an estimate based on valuations provided by two independent selling agents, both of whom provided a range of values within which the valuation might be considered acceptable. Lockfine calculated fair value at the average of the highest amounts in the two ranges provided. One of the agents’ valuations was not supported by any description of the method adopted or the assumptions underlying the calculation. Valuations were principally based on discussions with various potential buyers. Lockfine wished to know the principles behind the use of deemed cost and whether agents’ estimates were a reliable form. of evidence on which to base the fair value calculation of tangible assets to be then adopted as deemed cost. (6 marks)<br>(b) Lockfine was unsure as to whether it could elect to apply IFRS 3 Business Combinations retrospectively to past business combinations on a selective basis, because there was no purchase price allocation available for certain business combinations in its opening IFRS statement of financial position.<br>As a result of a major business combination, fishing rights of that combination were included as part of goodwill. The rights could not be recognised as a separately identifiable intangible asset at acquisition under the local GAAP because a reliable value was unobtainable for the rights. The fishing rights operated for a specified period of time.<br>On transition from local GAAP to IFRS, the fishing rights were included in goodwill and not separately identified because they did not meet the qualifying criteria set out in IFRS 1, even though it was known that the fishing rights had a finite life and would be fully impaired or amortised over the period specified by the rights. Lockfine wished to amortise the fishing rights over their useful life and calculate any impairment of goodwill as two separate calculations. (6 marks)<br>(c) Lockfine has internally developed intangible assets comprising the capitalised expenses of the acquisition and production of electronic map data which indicates the main fishing grounds in the world. The intangible assets generate revenue for the company in their use by the fishing fleet and are a material asset in the statement of financial position. Lockfine had constructed a database of the electronic maps. The costs incurred in bringing the information about a certain region of the world to a higher standard of performance are capitalised. The costs related to maintaining the information about a certain region at that same standard of performance are expensed. Lockfine’s accounting policy states that intangible assets are valued at historical cost. The company considers the database to have an indefinite useful life which is reconsidered annually when it is tested for impairment. The reasons supporting the assessment of an indefinite useful life were not disclosed in the financial statements and neither did the company disclose how it satisfied the criteria for recognising an intangible asset arising from development.<br>(d) The Lockfine board has agreed two restructuring projects during the year to 30 April 2011:<br>Plan A involves selling 50% of its off-shore fleet in one year’s time. Additionally, the plan is to make 40% of its seamen redundant. Lockfine will carry out further analysis before deciding which of its fleets and related employees will be affected. In previous announcements to the public, Lockfine has suggested that it may restructure the off-shore fleet in the future.<br>Plan B involves the reorganisation of the headquarters in 18 months time, and includes the redundancy of 20% of the headquarters’ workforce. The company has made announcements before the year end but there was a three month consultation period which ended just after the year end, whereby Lockfine was negotiating with employee representatives. Thus individual employees had not been notified by the year end. Lockfine proposes recognising a provision in respect of Plan A but not Plan B. (5 marks)<br>Professional marks will be awarded in question 2 for clarity and quality of discussion. (2 marks)<br>Required:<br>Discuss the principles and practices to be used by Lockfine in accounting for the above valuation and recognition issues.

Section A – This ONE question is compulsory and MUST be attempted<br>Rose, a public limited company, operates in the mining sector. The draft statements of financial position are as follows, at 30 April 2011:<br>The following information is relevant to the preparation of the group financial statements:<br>1 On 1 May 2010, Rose acquired 70% of the equity interests of Petal, a public limited company. The purchase consideration comprised cash of $94 million. The fair value of the identifiable net assets recognised by Petal was $120 million excluding the patent below. The identifiable net assets of Petal at 1 May 2010 included a patent which had a fair value of $4 million. This had not been recognised in the financial statements of Petal. The patent had a remaining term of four years to run at that date and is not renewable. The retained earnings of Petal were $49 million and other components of equity were $3 million at the date of acquisition. The remaining excess of the fair value of the net assets is due to an increase in the value of land.<br>Rose wishes to use the ‘full goodwill’ method. The fair value of the non-controlling interest in Petal was $46 million on 1 May 2010. There have been no issues of ordinary shares since acquisition and goodwill on acquisition is not impaired.<br>Rose acquired a further 10% interest from the non-controlling interest in Petal on 30 April 2011 for a cash consideration of $19 million.<br>2 Rose acquired 52% of the ordinary shares of Stem on 1 May 2010 when Stem’s retained earnings were 220 million dinars. The fair value of the identifiable net assets of Stem on 1 May 2010 was 495 million dinars. The excess of the fair value over the net assets of Stem is due to an increase in the value of land. The fair value of the non-controlling interest in Stem at 1 May 2010 was 250 million dinars.<br>Stem is located in a foreign country and operates a mine. The income of Stem is denominated and settled in dinars. The output of the mine is routinely traded in dinars and its price is determined initially by local supply and demand. Stem pays 40% of its costs and expenses in dollars with the remainder being incurred locally and settled in dinars. Stem’s management has a considerable degree of authority and autonomy in carrying out the operations of Stem and is not dependent upon group companies for finance.<br>Rose wishes to use the ‘full goodwill’ method to consolidate the financial statements of Stem. There have been no issues of ordinary shares and no impairment of goodwill since acquisition.<br>The following exchange rates are relevant to the preparation of the group financial statements:<br>3 Rose has a property located in the same country as Stem. The property was acquired on 1 May 2010 and is carried at a cost of 30 million dinars. The property is depreciated over 20 years on the straight-line method. At 30 April 2011, the property was revalued to 35 million dinars. Depreciation has been charged for the year but the revaluation has not been taken into account in the preparation of the financial statements as at 30 April 2011.<br>4 Rose commenced a long-term bonus scheme for employees at 1 May 2010. Under the scheme employees receive a cumulative bonus on the completion of five years service. The bonus is 2% of the total of the annual salary of the employees. The total salary of employees for the year to 30 April 2011 was $40 million and a discount rate of 8% is assumed. Additionally at 30 April 2011, it is assumed that all employees will receive the bonus and that salaries will rise by 5% per year.<br>5 Rose purchased plant for $20 million on 1 May 2007 with an estimated useful life of six years. Its estimated residual value at that date was $1·4 million. At 1 May 2010, the estimated residual value changed to $2·6 million. The change in the residual value has not been taken into account when preparing the financial statements as at 30 April 2011.<br>Required:<br>(a) (i) Discuss and apply the principles set out in IAS 21 The Effects of Changes in Foreign Exchange Rates in order to determine the functional currency of Stem. (7 marks)<br>(ii) Prepare a consolidated statement of financial position of the Rose Group at 30 April 2011, in accordance with International Financial Reporting Standards (IFRS), showing the exchange difference arising on the translation of Stem’s net assets. Ignore deferred taxation. (35 marks)<br>(b) Rose was considering acquiring a service company. Rose stated that the acquisition may be made because of the value of the human capital and the opportunity for synergies and cross-selling opportunities. Rose estimated the fair value of the assets based on what it was prepared to pay for them. Rose further stated that what it was willing to pay was influenced by its future plans for the business.<br>The company to be acquired had contract-based customer relationships with well-known domestic and international companies and some mining companies. Rose estimated that the fair value of all of these customer relationships to be zero because Rose already enjoyed relationships with the majority of those customers.<br>Required:<br>Discuss the validity of the accounting treatment proposed by Rose and whether such a proposed treatment raises any ethical issues. (6 marks)<br>Professional marks will be awarded in part (b) for clarity and quality of the presentation and discussion. (2 marks)

(a) The existing standard dealing with provisions IAS 37, Provisions, Contingent Liabilities and Contingent Assets, has been in place for many years and is sufficiently well understood and consistently applied in most areas. The IASB feels it is time for a fundamental change in the underlying principles for the recognition and measurement of non-financial liabilities. To this end, the Board has issued an Exposure Draft, ‘Measurement of Liabilities in IAS 37 – Proposed amendments to IAS 37’.<br>Required:<br>(i) Discuss the existing guidance in IAS 37 as regards the recognition and measurement of provisions and why the IASB feels the need to replace this guidance; (9 marks)<br>(ii) Describe the new proposals that the IASB has outlined in the Exposure Draft. (7 marks)<br>(b) Royan, a public limited company, extracts oil and has a present obligation to dismantle an oil platform. at the end of the platform’s life, which is 10 years. Royan cannot cancel this obligation or transfer it. Royan intends to carry out the dismantling work itself and estimates the cost of the work to be $150 million in 10 years time. The present value of the work is $105 million.<br>A market exists for the dismantling of an oil platform. and Royan could hire a third party contractor to carry out the work. The entity feels that if no risk or probability adjustment were needed then the cost of the external contractor would be $180 million in ten years time. The present value of this cost is $129 million. If risk and probability are taken into account, then there is a probability of 40% that the present value will be $129 million and 60% probability that it would be $140 million, and there is a risk that the costs may increase by $5 million.<br>Required:<br>Describe the accounting treatment of the above events under IAS 37 and the possible outcomes under the proposed amendments in the Exposure Draft. (7 marks)<br>Professional marks will be awarded in question 4 for the quality of the discussion. (2 marks)

Section B – TWO questions ONLY to be attempted<br>William is a public limited company and would like advice in relation to the following transactions.<br>(a) William owned a building on which it raised finance. William sold the building for $5 million to a finance company on 1 June 2011 when the carrying amount was $3·5 million. The same building was leased back from the finance company for a period of 20 years, which was felt to be equivalent to the majority of the asset’s economic life. The lease rentals for the period are $441,000 payable annually in arrears. The interest rate implicit in the lease is 7%. The present value of the minimum lease payments is the same as the sale proceeds.<br>William wishes to know how to account for the above transaction for the year ended 31 May 2012. (7 marks)<br>(b) William operates a defined benefit scheme for its employees. At June 2011, the net pension liability recognised in the statement of financial position was $18 million, excluding an unrecognised actuarial gain of $15 million which William wishes to spread over the remaining working lives of the employees. The scheme was revised on 1 June 2011. This resulted in the benefits being enhanced for some members of the plan and because benefits do not vest for these members for five years, William wishes to spread the increased cost over that period. However, part of the scheme was to be closed, without any redundancy of employees.<br>William requires advice on how to account for the above scheme under IAS 19 Employee Benefits including the presentation and measurement of the pension expense. (7 marks)<br>(c) On 1 June 2009, William granted 500 share appreciation rights to each of its 20 managers. All of the rights vest after two years service and they can be exercised during the following two years up to 31 May 2013. The fair value of the right at the grant date was $20. It was thought that three managers would leave over the initial two-year period and they did so. The fair value of each right was as follows:<br>On 31 May 2012, seven managers exercised their rights when the intrinsic value of the right was $21.<br>William wishes to know what the liability and expense will be at 31 May 2012. (5 marks)<br>(d) William acquired another entity, Chrissy, on 1 May 2012. At the time of the acquisition, Chrissy was being sued as there is an alleged mis-selling case potentially implicating the entity. The claimants are suing for damages of $10 million. William estimates that the fair value of any contingent liability is $4 million and feels that it is more likely than not that no outflow of funds will occur.<br>William wishes to know how to account for this potential liability in Chrissy’s entity financial statements and whether the treatment would be the same in the consolidated financial statements. (4 marks)<br>Required: Discuss, with suitable computations, the advice that should be given to William in accounting for the above events.<br>Note: The mark allocation is shown against each of the four events above.<br>Professional marks will be awarded in question 2 for the quality of the discussion. (2 marks)

The company would like advice on how to treat certain items under IAS19, ‘Employee Benefits’ and IAS37 ‘Provisions,<br>Contingent Liabilities and Contingent Assets’. The company operates the Macaljoy (2006) Pension Plan which<br>commenced on 1 November 2006 and the Macaljoy (1990) Pension Plan, which was closed to new entrants from<br>31 October 2006, but which was open to future service accrual for the employees already in the scheme. The assets<br>of the schemes are held separately from those of the company in funds under the control of trustees. The following<br>information relates to the two schemes:<br>Macaljoy (1990) Pension Plan<br>The terms of the plan are as follows:<br>(i) employees contribute 6% of their salaries to the plan<br>(ii) Macaljoy contributes, currently, the same amount to the plan for the benefit of the employees<br>(iii) On retirement, employees are guaranteed a pension which is based upon the number of years service with the<br>company and their final salary<br>The following details relate to the plan in the year to 31 October 2007:<br>Warranties<br>Additionally the company manufactures and sells building equipment on which it gives a standard one year warranty<br>to all customers. The company has extended the warranty to two years for certain major customers and has insured<br>against the cost of the second year of the warranty. The warranty has been extended at nil cost to the customer. The<br>claims made under the extended warranty are made in the first instance against Macaljoy and then Macaljoy in turn<br>makes a counter claim against the insurance company. Past experience has shown that 80% of the building<br>equipment will not be subject to warranty claims in the first year, 15% will have minor defects and 5% will require<br>major repair. Macaljoy estimates that in the second year of the warranty, 20% of the items sold will have minor defects<br>and 10% will require major repair.

(a) An assessment of accounting practices for asset impairments is especially important in the context of financial reporting quality in that it requires the exercise of considerable management judgement and reporting discretion. The importance of this issue is heightened during periods of ongoing economic uncertainty as a result of the need for companies to reflect the loss of economic value in a timely fashion through the mechanism of asset write-downs. There are many factors which can affect the quality of impairment accounting and disclosures. These factors include changes in circumstance in the reporting period,the market capitalisation of the entity, the allocation of goodwill to cash generating units, valuation issues and the nature of the disclosures.<br>Required:<br>Discuss the importance and significance of the above factors when conducting an impairment test under IAS 36 Impairment of Assets. (13 marks)<br>(b) (i) Estoil is an international company providing parts for the automotive industry. It operates in many different jurisdictions with different currencies. During 2014, Estoil experienced financial difficulties marked by a decline in revenue, a reorganisation and restructuring of the business and it reported a loss for the year. An impairment test of goodwill was performed but no impairment was recognised. Estoil applied one discount rate for all cash flows for all cash generating units (CGUs), irrespective of the currency in which the cash flows would be generated. The discount rate used was the weighted average cost of capital (WACC) and Estoil used the 10-year government bond rate for its jurisdiction as the risk free rate in this calculation. Additionally, Estoil built its model using a forecast denominated in the functional currency of the parent company. Estoil felt that any other approach would require a level of detail which was unrealistic and impracticable. Estoil argued that the different CGUs represented different risk profiles in the short term, but over a longer business cycle, there was no basis for claiming that their risk profiles were different.<br>(ii) Fariole specialises in the communications sector with three main CGUs. Goodwill was a significant component of total assets. Fariole performed an impairment test of the CGUs. The cash flow projections were based on the most recent financial budgets approved by management. The realised cash flows for the CGUs were negative in 2014 and far below budgeted cash flows for that period. The directors had significantly raised cash flow forecasts for 2015 with little justification. The projected cash flows were calculated by adding back depreciation charges to the budgeted result for the period with expected changes in working capital and capital expenditure not taken into account.<br>Required:<br>Discuss the acceptability of the above accounting practices under IAS 36 Impairment of Assets. (10 marks)<br>Professional marks will be awarded in question 4 for clarity and quality of presentation. (2 marks)

Required:<br>(a) (i) Describe the current presentation requirements relating to the statement of profit or loss and other comprehensive income. (4 marks)<br>(ii) Discuss, with examples, the nature of a reclassification adjustment and the arguments for and against allowing reclassification of items to profit or loss. Note: A brief reference should be made in your answer to the IASB’s Discussion Paper on the Conceptual Framework. (5 marks)<br>(iii) Discuss the principles and key components of the IIRC’s Framework, and any concerns which could question the Framework’s suitability for assessing the prospects of an entity. (8 marks)<br>(b) Cloud, a public limited company, regularly purchases steel from a foreign supplier and designates a future purchase of steel as a hedged item in a cash flow hedge. The steel was purchased on 1 May 2014 and at that date, a cumulative gain on the hedging instrument of $3 million had been credited to other comprehensive income. At the year end of 30 April 2015, the carrying amount of the steel was $8 million and its net realisable value was $6 million. The steel was finally sold on 3 June 2015 for $6·2 million.<br>On a separate issue, Cloud purchased an item of property, plant and equipment for $10 million on 1 May 2013. The asset is depreciated over five years on the straight line basis with no residual value. At 30 April 2014, the asset was revalued to $12 million. At 30 April 2015, the asset’s value has fallen to $4 million. The entity makes a transfer from revaluation surplus to retained earnings for excess depreciation, as the asset is used.<br>Required:<br>Show how the above transactions would be dealt with in the financial statements of Cloud from the date of the purchase of the assets.<br>Note: Candidates should ignore any deferred taxation effects. (6 marks)<br>Professional marks will be awarded in question 4 for clarity and quality of presentation. (2 marks)

Section B – TWO questions ONLY to be attempted<br>(a) Cate is an entity in the software industry. Cate had incurred substantial losses in the fi nancial years 31 May 2004 to 31 May 2009. In the fi nancial year to 31 May 2010 Cate made a small profi t before tax. This included signifi cant non-operating gains. In 2009, Cate recognised a material deferred tax asset in respect of carried forward losses, which will expire during 2012. Cate again recognised the deferred tax asset in 2010 on the basis of anticipated performance in the years from 2010 to 2012, based on budgets prepared in 2010. The budgets included high growth rates in profi tability. Cate argued that the budgets were realistic as there were positive indications from customers about future orders. Cate also had plans to expand sales to new markets and to sell new products whose development would be completed soon. Cate was taking measures to increase sales, implementing new programs to improve both productivity and profi tability. Deferred tax assets less deferred tax liabilities represent 25% of shareholders’ equity at 31 May 2010. There are no tax planning opportunities available to Cate that would create taxable profi t in the near future. (5 marks)<br>(b) At 31 May 2010 Cate held an investment in and had a signifi cant infl uence over Bates, a public limited company. Cate had carried out an impairment test in respect of its investment in accordance with the procedures prescribed in IAS 36, Impairment of assets. Cate argued that fair value was the only measure applicable in this case as value-in-use was not determinable as cash fl ow estimates had not been produced. Cate stated that there were no plans to dispose of the shareholding and hence there was no binding sale agreement. Cate also stated that the quoted share price was not an appropriate measure when considering the fair value of Cate’s signifi cant infl uence on Bates. Therefore, Cate estimated the fair value of its interest in Bates through application of two measurement techniques; one based on earnings multiples and the other based on an option–pricing model. Neither of these methods supported the existence of an impairment loss as of 31 May 2010. (5 marks)<br>(c) At 1 April 2009 Cate had a direct holding of shares giving 70% of the voting rights in Date. In May 2010, Date issued new shares, which were wholly subscribed for by a new investor. After the increase in capital, Cate retained an interest of 35% of the voting rights in its former subsidiary Date. At the same time, the shareholders of Date signed an agreement providing new governance rules for Date. Based on this new agreement, Cate was no longer to be represented on Date’s board or participate in its management. As a consequence Cate considered that its decision not to subscribe to the issue of new shares was equivalent to a decision to disinvest in Date. Cate argued that the decision not to invest clearly showed its new intention not to recover the investment in Date principally through continuing use of the asset and was considering selling the investment. Due to the fact that Date is a separate line of business (with separate cash fl ows, management and customers), Cate considered that the results of Date for the period to 31 May 2010 should be presented based on principles provided by IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. (8 marks)<br>(d) In its 2010 fi nancial statements, Cate disclosed the existence of a voluntary fund established in order to provide a post-retirement benefi t plan (Plan) to employees. Cate considers its contributions to the Plan to be voluntary, and has not recorded any related liability in its consolidated fi nancial statements. Cate has a history of paying benefi ts to its former employees, even increasing them to keep pace with infl ation since the commencement of the Plan. The main characteristics of the Plan are as follows:<br>(i) the Plan is totally funded by Cate;<br>(ii) the contributions for the Plan are made periodically;<br>(iii) the post retirement benefi t is calculated based on a percentage of the fi nal salaries of Plan participants dependent on the years of service;<br>(iv) the annual contributions to the Plan are determined as a function of the fair value of the assets less the liability arising from past services.<br>Cate argues that it should not have to recognise the Plan because, according to the underlying contract, it can terminate its contributions to the Plan, if and when it wishes. The termination clauses of the contract establish that Cate must immediately purchase lifetime annuities from an insurance company for all the retired employees who are already receiving benefi t when the termination of the contribution is communicated. (5 marks)<br>Required:<br>Discuss whether the accounting treatments proposed by the company are acceptable under International Financial Reporting Standards.<br>Professional marks will be awarded in this question for clarity and quality of discussion. (2 marks)<br>The mark allocation is shown against each of the four parts above.

What is the passage mainly about?

A. Environmental protection.
B. Water crisis worldwide.
C. A young environmental scientist
D. Awareness of water shortage.