c describe alternative formats of balance sheet presentation;

Question 1

Format to eval. Liquidity: Classified balance sheet

Answer 1

IFRS and GAAP require firms to seperatly report their current assets and noncurrent assets and current liabilities and non-current liabilities

aka the ‘current/noncurrent’ format

Question 2

Liquidity based presentations: Used in banking:

Answer 2

IFRS choice = liquidity based pres

A’s and L’s in order of liquidity.

Question 3

Classified Balance Sheet (Liquidity Based Format)

Answer 3

IFRS, GAAP require that current/non-currents reported seperately>Easier to evaluate liquidity