$($a$)$ The management of Burwood Ltd$.$ decides to undertake an upward revaluation of its non$-$current assets just prior to the end of the financial year, the effect being that the value of total assets of the company increases, as does the total shareholders' equity. Required: Explain the decision of management to undertake an asset revaluation using the debt hypothesis of Positive Accounting Theory.

$($b$)$ The board of Burwood Ltd is aware of the climate change issue and consider it necessary to adopt changes in the company's operations that would decrease its greenhouse gas emissions. The board has a strong opinion that the company was'always going to pay a price for carbon reduction', as the environmentally friendly technology will bring the long$-$term benefits.

Required: Discuss and explain what benefits $($at least $2$ benefits$)$ the board might be referring. 

Answer rating: 100% (QA)

a The managements decision to undertake an upward revaluation of its noncurrent assets just before t... View the full answer