1. Which measurements currently reported in balance sheets are not consistent with the physical capital maintenance concept? Give examples. 2. Do you believe that the cash flows from the sale of an

1. Which measurements currently reported in balance sheets are not consistent with the physical capital maintenance concept? Give examples.

2. Do you believe that the cash flows from the sale of an investment should also include the tax effect of the sale? Explain. Do you believe that cash flows from sales of investments should be net of their tax effects, or do you believe that the tax effect should remain an operating activity because it is a part of “payments to the government”? Explain.

Leave a Comment