Case 5 - CASE 5: Andrea Pafko, corporate comptroller for...

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CASE 5: Andrea Pafko, corporate comptroller for Nicholson Industries, is trying to decide how to present “Property, plant and equipment” in the balance sheet. She realizes that the statement of cash flows will show that the company made a significant investment in purchasing new equipment this year, but overall she knows the company’s plant assets are rather old. She feels that she can disclose one figure titled “Property, plant, and equipment, net of depreciation,” and the result will be a low figure. However, it will not disclose the age of the assets. If she chooses to show the cost less accumulated depreciation, the age of the asset will be apparent. 1. What are the ethical issues involved? The ethical issue is ensuring the amount for the Plant, Property and Equipment is disclosed in the financial statement in order for investors or shareholders to see the book value of the asset. However, Andrea Pafko is recording only the Property, plant and equipment the net of depreciation
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Case 5 - CASE 5: Andrea Pafko, corporate comptroller for...

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