Explain and answer each essay question in 1 to 3 paragraphs

#1 10 points	Sustainability Reporting In class we discussed that financial and sustainability reporting are different in many ways but the most important difference is their purported goal. Financial Reporting is about performance reporting. Sustainability reporting is about "impact" reporting relative to E, S, and G. ESSAY: Explain why Sustainability Reporting and Financial Reporting will eventually combined under one reporting conceptual framework or must remain distinct and apart.
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# 2 10 points	Fair Value Reporting The best and most traditional example of fair value accounting is broker dealer accounting. If a broker only has securities on its balance sheet, then its profit is the day-to-day fair value gain or loss on those securities offset by the fair value losses and gains on its debt. The best and most traditional example of cost based accrual accounting might be a utility that has no opportunity to use fair value accounting. But the utility has a massive plant on its balance sheet and generates earnings by billing clients and matching its fuel and other costs to the sale of electricity to those clients. These are the extremes. ESSAY: Adopt the position that as we move out of the broker dealer environment into other industries that the use of fair value accounting is not appropriate (this remains the opinion many places around the world outside of the USA). Explain why fair value accounting is best seen as a purpose built model for one industry only - broker dealers.

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#3 10 points	Foreign Currency Reporting In our current US GAAP model we translate our foreign affiliates' financials into US $'s and then consolidate them into the Parent financials. A problem arises because, it its simplest case, the balance sheet is remeasured at spot balance sheet foreign exchange rates whereas the income statement is remeasured at weighted average foreign exchange rates that prevailed during the reporting period. Therefore, the balance sheet does not balance, and we need to a plug to make it balance, the cumulative translation adjustment. When these rules became US GAAP under FAS52 three out of seven board members disagreed and wrote a dissent. In their dissent they preferred a model where every foreign affiliate would keep a set of books in US Dollars and then at year end the Dollar financials of all members of the conglomerate would be added together into the Consolidated financials. The need for the CTA might evaporate. You may want to refer to FAS52 'as issued' and it is available at www.fasb.org. ESSAY: If your prefer the dissenting model explain its strengths and the weaknesses of the existing US GAAP rules. If you prefer the US GAAP rules, explain their strengths and the weakness of the dissenting model.
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