Stora Enso Oyj describes its business in its annual report as the "global rethinker of the biomaterials, paper, packaging and wood products industry."
Instructions
Access the financial statements of Stora Enso Oyj for the year ended December 31, 2011, from the company's website. Using the financial statements, answer the following questions.
(a) Describe the accounting policies that the company uses for reporting inventories. 'What types of expenses are included in costs? Is interest included in inventory costs?
(b) 'What different components are there in inventory and what is the percentage of each to the total for 2011 and 2010? Which items represent a high percentage of the inventory? How has this changed over the years? Is there any cause for concern? 'What was the amount reported on the income statement related to inventory items? Is it possible to calculate the days in inventory ratio?
(c) How are the inventories of the standing trees measured and reported? What types of assumptions are used to determine the reported amount of these assets? Where are these assets located? How much was harvested this year? 'What other changes occurred in the statement of financial position and what were changes related to in 2011? How are the changes in these amounts reported and what are the impacts on earnings for the current year and previous year?
(d) Does the company use the allowance method or the direct method to record write downs to the inventory? What were these related amounts at the 2011 year end? Were there any amounts reversed during the year?
(e) Is this disclosure useful to the reader? Is there any other information you would like to have?