Question:
Part I: Read paragraph OB11 of Statement of Financial Accounting Concepts No. 8. Conceptual Framework for Financial Reporting: Chapter 1. The Objective of General purpose Financial Reporting, and Chapter 3. Qualitative Characteristics of Useful/Financial Information. What does FASB say about the degree to which the balance sheet is made up of estimates as opposed to ex. act depictions of the underlying economic position of the entity?
Part 2: The disclosures related to critical accounting estimates and judgments were previously seen in Exhibit 3.2 for Telefon a ktiebola get LM Ericsson (Ericsson). The balance sheets are presented on the following page. Focusing on Ericsson's assets, do you agree with the FASB's assessment about the degree to which the balance sheet is made up of estimates? Explain your answer.
Transcribed Image Text:
TELEFONAKTJEBOLAGET LM ERICSSON DECEMBER 31, 2015 CONSO IDATED BALANCE SHEET December 31, SEK million Notes 2014 2015 Assets Non curent assets Intangible assets C10 C26 SEK 5,493 SEK 3 570 Capitał zed development expenses Goodw lI 41,087 38,330 Intellectual property rights, brands and other intangb e assets 9,316 12,534 C11, C26 C27 13,341 Property, pant and equipment 15,901 Fnanc al assets 1.210 Equity in jo nt ventures and assoc ated companies C12 2,793 Other nvestments in shares and participations C12 1,275 591 C12 Customer finance. non current 1,739 1.932 5 634 C12 5,900 Other financ al assets, non-curent 13, 183 Deferred taxassets C8 12,778 SEK 91, 769 SEK 94 838 Current assets Inventories C13 SEK 28,436 SEK28, 175 Trade receivables 77,893 C14 71,069 2,041 Customer finance current C14 2,289 C15 Other current receivables 21,709 21,273 31,171 Short term investments C20 26 046 40 224 189 525 Cash and cash equ va en ts C25 40,988 201,789 Tot al assets SEK 284.363 SEK 293.558 Equity and liabilities Equity Stockho ders' equity SEK 146 525 SEK 144,306 C16 Noncontrolling interest in equity of subsid ar es 841 1,003 SEK 145,309 SEK 147366 Non-current liabilities C17 SEK 22,664 SEK 20,385 Post-emp oyment benefits Provis ons, non current C18 176 202 Deferred tax liabilities C8 3, 177 2.472 Borro wings, non-current C19 C20 22,744 21,864 Other non-curent liab lit es 1,851 1,797 SEK49,907 SEK 47,425 CONSOLIDATED BALANCE SHEET December 31, SEK million 2015 2014 Notes Currentlia bil ties Provisions, current Borrow 1gs current Trade payab es Other current labil ties SEK3,662 2,376 22,389 58,663 SEK 4,225 2,281 C18 C19 C20 24,473 C22 C21 69,86 100,824 87090 Total equity and liabilities SEK 284.363 SEK 293,558