SOLUTION MANUAL FOR nd nd
Intermediate Accounting Volume 1 8E Thomas H. Beechy, Joan
nd nd nd nd nd nd nd nd
ndE. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-
nd nd nd nd nd nd nd nd
Lee Sevel
nd
All ndChapters nd1-11 n d nd [With ndAppendix]
Chapter 1: The Framework for Financial Reporting
nd nd nd nd nd nd
Case n d 1-1 Mulla ndand ndYang
1-2 Richard ndWright
1-3 Taylor ndJay
Suggested
ndTime ndTechnical 1-1 Chapter
ndoverview, ndtrue-falsend.............................. 10
1-2 Chapter ndoverview, ndtrue-falsend.............................. 10
1-3 Acronyms……………………………………… 10
1-4 IFRS ndor ndASPE…………………………………. 10
1-5 IFRS ndor ndASPE…………………………………. 10
1-6 Disclosed ndbasis ndof ndaccounting………………… 10
1-7 GAAP ndand ndreporting ndcurrencynd........................... 10
1-8 GAAP ndand ndreporting ndcurrencynd........................... 10
1-9 Users ndand ndobjectives………………………….. 10
1-10 Required ndfinancial ndstatementsnd............................ 10
Assignment nd1-1 IASB ndstandard-setting...................................... 10
1-2 International ndcomparisons................................ 10
1-3 Accounting ndchoicesnd.......................................... 10
1-4 Effect ndof ndaccounting ndpolicies n d .......................... 15
1-5 Reporting ndalternativesnd...................................... 10
1-6 Non-IFRS ndsituations nd........................................ 15
1-7 Reporting ndsituationsnd......................................... 20
1-8 Reporting ndsituationsnd......................................... 15
1-9 Objectives ndof ndfinancial ndreporting nd..................... 20
1-10 Impact ndof nddiffering ndobjectives n d ......................... 20
1-11 Accounting ndpolicy nddisagreement...................... 15
1-12 Accounting ndpolicies ndand ndreporting ndobjectives.. 10
1-13 Policy ndchoicend.................................................... 20
nd nd nd nd nd
nd nd nd nd nd nd nd nd
nd
,Cases
Case nd1-1 nd(LO1.2, ndLO1.3, ndLO1.4, ndLO1.5)
Notes ndfor ndDiscussion ndWith ndElicia:
There ndis nda ndconflict ndof ndinterest ndbetween ndthe ndobjectives ndof ndElicia ndand ndDabika nddue ndto
ndthe ndbuyout ndclause ndin ndthe ndshareholder ndagreement. ndElicia ndwill ndhave nda ndmotivation ndto
nddecrease ndshareholders‘ ndequity ndsince ndthis ndwill ndreduce ndthe ndamount ndthat ndshe ndwill ndbe
ndrequired ndto ndpay ndto ndbuy ndout ndDabika. ndDabika ndwill ndbe ndinterested ndin ndincreasing
ndshareholders‘ ndequity ndto ndincrease ndthe ndamount ndshe ndwill ndreceive. ndIt ndmust ndbe ndclarified
ndwho ndI ndam ndworking ndfor ndsince ndI ndmay ndhave nda ndconflict ndof ndinterest ndsince ndI ndknow
ndboth ndparties.
It n d is n d important n d that n d all n d accounting n d policies n d are n d ‗fair‘ n d to n d both n d sides. n d What n d is n d conside
‗fair‘? ndFrom ndDabika‘s ndperspective, ndfair ndcould ndbe ndaccounting ndpolicies ndconsistent
ndwith ndprior ndyears. ndFrom ndElicia‘s ndperspective, ndfair ndcould ndbe ndif ndthe ndeconomic ndevents
ndchange ndthe ndaccounting ndpolicy ndwould ndchange. ndFair ndcould ndbe ndboth ndsides ndsplit ndthe
nddifference ndwhere ndDabika ndand ndElicia nddisagree ndon ndvalue. ndIn ndthe ndfuture ndit ndis
ndimportant ndthat ndthe ndshareholders ndagreement ndis ndmore ndspecific.
Due ndto ndthe ndchoices ndallowed ndwithin ndGAAP nda ndpolicy ndcould ndbe ndselected ndthat ndwould
ndbe ndmore ndbeneficial ndto ndone ndof ndthe ndparties. ndIt ndis ndassumed ndsince ndthis ndis nda ndsmall
ndprivate ndcompany ndthat ndthey ndare ndusing ndASPE. ndThere ndis ndno ndindication ndthat ndneither
ndElicia ndor ndDabika ndwould ndbe ndusing ndIFRS ndnor ndthat ndthe ndbank ndrequires ndit.
Inventory
Elicia ndwants ndto ndwrite ndoff ndthe ndinventory ndvalue ndfor ndthe ndgarden ndgnomes ndand ndstatues
ndand ndthis ndwill nddecrease ndthe ndamount ndof ndthe ndpayment ndto ndDabika. ndAccording ndto
ndASPE, ndinventory ndwould ndbe ndvalued ndat ndthe ndlower ndof ndcost ndand ndnet ndrealizable ndvalue.
ndEven ndthough ndthis ndinventory ndhas ndbeen ndsitting ndin ndthe ndgardening ndcentre ndthere ndis ndstill
nda ndfew ndbeing ndsold ndeach ndyear. ndThis ndindicates ndthere ndis ndstill ndsome ndvalue ndassociated
ndwith ndthe ndinventory ndand ndtherefore ndit ndshould ndnot ndbe ndwritten nddown ndto ndzero. ndIt
ndshould ndbe nddetermined ndwhat ndthe ndnet ndrealizable ndvalue ndof ndthis ndinventory ndis ndto
nddetermine ndthe ndamount ndof ndthe ndwrite ndoff. ndIf ndit ndis ndall ndwritten ndoff ndand ndthen ndsold ndat nda
ndlater nddate ndthis ndwould ndnot ndbe ndfair ndto ndDabika ndsince ndElicia ndwould ndget ndthe ndbenefit ndof
nda ndreduced ndshareholders‘ ndequity ndand ndthus nda ndlower ndpayment ndrequired ndto ndDabika.
ndThe ndpurchase ndof ndthis ndinventory ndwould ndhave ndbeen nda nddecision ndmade ndby ndboth
ndDabika ndand ndElicia ndso ndif ndthe ndinventory ndis ndunsellable ndthey ndshould ndboth ndbear ndthe
ndimpact ndof ndthis nddecision.
Warranty
According ndto ndASPE ndthe ndaccounting ndpolicy ndis ndappropriate ndand nda ndwarranty ndexpense
ndshould ndbe ndincluded ndfor ndthe ndguarantee. ndThe ndimpact ndis ndthat ndthis ndwould nddecrease
ndshareholders‘ ndequity ndand ndthe ndamount ndof ndthe ndpayment ndto ndDabika. ndThis ndis nda ndnew
ndpolicy ndthat nddid ndnot ndexist nduntil ndthis ndyear. ndThe ndestimate ndof nd5% ndwas ndonly ndbased ndon
ndsales ndfrom ndthe ndfall. ndSince ndit ndis nda ndnew ndpolicy ndthat ndwas ndmade ndby ndElicia ndon ndher
nd nd nd nd nd
nd nd nd nd nd nd nd
nd
,ndown ndit ndmay ndbe ndappropriate ndthat ndthe ndimpact ndof ndthis ndis ndexcluded ndfrom nd the
ndcalculation nd of ndshareholders‘ ndequity. ndAt nd a nd minimum ndthe ndestimate nd should
nd nd nd nd nd
nd nd nd nd nd nd nd nd
nd
, be ndreviewed ndto nddetermine ndif ndit ndis ndreasonable. ndFurthermore, ndthe ndestimate, ndif
ndincluded ndin ndthe ndshareholders‘ ndequity ndcalculation, ndshould ndbe ndagreed ndupon ndby ndboth
ndElicia ndand ndDabika.
Computer ndEquipment
ASPE ndis ndflexible ndin ndthe ndmethod ndused ndto nddepreciate ndassets. ndThe nddeclining ndbalance
ndmethod ndusing nd40% ndwould ndwrite ndoff ndthe ndvalue ndof ndthe ndcomputers ndin ndapproximately
ndtwo ndyears. ndThis ndis ndvery ndfast ndespecially ndfor nda ndsmall ndcompany ndthat ndis ndlikely ndto nduse
nda ndcomputer ndfor nda ndlonger ndperiod ndof ndtime nddue ndto ndlimited ndresources ndas ndcompared ndto
nda ndlarger ndcompany. ndJust ndbecause ndthe ndcomputer ndmay ndbecome ndobsolete ndquickly nddoes
ndnot ndmean ndthe ndbusiness ndwill ndnot ndcontinue ndto ndderive ndbenefit ndfrom ndthe ndcontinued nduse
ndof ndthe ndcomputer. ndThe ndimpact ndof ndhigher nddepreciation ndis nda ndreduction ndin ndthe
ndpayment ndto ndDabika. ndIf ndwe ndlook ndat ndconsistency ndwith ndother ndassets ndit ndwould ndbe
ndappropriate ndto nduse ndthe ndstraight ndline ndmethod. ndWe ndshould ndinquire ndwith ndElicia ndas ndto
ndher ndrationale ndfor ndchoosing nddeclining ndbalance ndinstead ndof ndthe ndstraight-line
nddepreciatoin ndmethod ndused ndfor ndall ndother ndassets ndand nddetermine ndthe nddeclining ndmethod
ndreflects ndthe ndactual ndusage ndof ndthe ndasset nd(i.e. ndmore ndof ndthe ndasset ndused ndearlier ndon).
ndSince ndagain ndsince ndthis ndwas nda nddecision ndmade ndonly ndbe ndElicia ndmaybe ndit ndshould ndbe
ndexcluded ndfrom ndthe ndcalculation ndor ndmaybe ndthe ndpolicy ndshould ndbe ndconsistent ndwith
ndtheir ndother ndassets ndbut ndfurther ndinformation ndis ndrequired.
Case nd1-2 nd(LO1.2, ndLO1.3, ndLO1.4, ndLO1.5)
Dear ndRichard ndWright:
I ndam ndhappy ndto ndrespond ndto ndyour ndquestions ndregarding ndthe ndaccounting ndchanges ndthat
ndthe ndnew ndbanker ndhas ndrequested. ndIt ndis ndimportant ndthat ndyou ndrealize ndthat ndthe ndneeds ndof
ndthe ndbanker ndare nddifferent ndthan ndyour ndneeds. ndThe ndbank ndis ndinterested ndin ndyour ndability
ndto ndmake ndloan ndpayments; ndtherefore, ndthe ndbanker ndwants ndto ndassess ndfuture ndcash ndflows,
ndcollateral ndand ndyour ndability ndto ndpay ndback ndthe ndloan.
First, ndthere ndis ndthe ndissue ndof ndmoving ndto ndthe ndaccrual ndbasis. ndWhile ndit‘s ndtrue ndthat,
ndultimately, ndwhat ndyou ndearn ndis ndthe ndnet ndcash ndin ndyour ndpocket, ndthe ndcash ndbasis ndof
ndaccounting nddoesn‘t ndwholly ndcapture ndall ndof ndthe ndcash ndflows ndthat ndwill ndhappen ndin ndthe
ndfuture. ndYour ndbanker ndwants ndto ndknow ndwhat ndliabilities ndyou‘ll ndhave ndto ndpay ndin ndthe
ndcoming ndmonths nd(and ndyears), ndand ndwhat ndamounts ndyou ndcurrently ndare ndowed ndthat ndwill
ndbe ndcollected ndin ndthe ndfuture ndweeks ndor ndmonths. ndThe ndaccrual ndmethod ndreally ndgives nda
ndclear ndpicture ndof ndfuture nd―cash ndflow‖.
It‘s ndfor ndmuch ndthe ndsame ndreason ndthat ndhe ndwishes ndyou ndto ndshow ndyour ndcattle ndat ndmarket
ndvalue. ndI‘m ndsure ndhe ndrecognizes ndthat ndboth ndyour nddairy ndcattle ndand ndyour ndbreeders ndare
ndintended ndfor n d continued nduse ndand ndare ndnot ndfor ndsale ndin ndthe ndnormal ndcourse ndof
ndbusiness.As ndsaleable ndstock, ndthe ndcattle ndrepresent nda ndpotential ndcash ndresource ndin ndthe
ndevent ndof ndbankruptcy ndor nddefault. ndAfter ndall, ndyou ndprobably nduse ndthe ndcattle ndas
ndcollateral ndfor ndloans, ndand ndhe ndneeds ndto ndknow ndthe ndvalue ndof ndthat ndcollateral.
You ndshould ndnot ndtry ndto ndestimate ndthe ndvalue ndof ndyour ndstock ndby ndyourself. ndFor
ndcredibility, ndyou ndshould ndobtain ndan ndindependent ndestimate. ndThe ndvaluation ndwill ndrequire
nda ndprofessional ndevaluation nd(and ndthe ndcost ndthereof), ndbut ndwill ndbe ndnecessary ndin ndorder
nd nd nd nd nd
nd nd nd nd nd nd nd
nd
Intermediate Accounting Volume 1 8E Thomas H. Beechy, Joan
nd nd nd nd nd nd nd nd
ndE. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-
nd nd nd nd nd nd nd nd
Lee Sevel
nd
All ndChapters nd1-11 n d nd [With ndAppendix]
Chapter 1: The Framework for Financial Reporting
nd nd nd nd nd nd
Case n d 1-1 Mulla ndand ndYang
1-2 Richard ndWright
1-3 Taylor ndJay
Suggested
ndTime ndTechnical 1-1 Chapter
ndoverview, ndtrue-falsend.............................. 10
1-2 Chapter ndoverview, ndtrue-falsend.............................. 10
1-3 Acronyms……………………………………… 10
1-4 IFRS ndor ndASPE…………………………………. 10
1-5 IFRS ndor ndASPE…………………………………. 10
1-6 Disclosed ndbasis ndof ndaccounting………………… 10
1-7 GAAP ndand ndreporting ndcurrencynd........................... 10
1-8 GAAP ndand ndreporting ndcurrencynd........................... 10
1-9 Users ndand ndobjectives………………………….. 10
1-10 Required ndfinancial ndstatementsnd............................ 10
Assignment nd1-1 IASB ndstandard-setting...................................... 10
1-2 International ndcomparisons................................ 10
1-3 Accounting ndchoicesnd.......................................... 10
1-4 Effect ndof ndaccounting ndpolicies n d .......................... 15
1-5 Reporting ndalternativesnd...................................... 10
1-6 Non-IFRS ndsituations nd........................................ 15
1-7 Reporting ndsituationsnd......................................... 20
1-8 Reporting ndsituationsnd......................................... 15
1-9 Objectives ndof ndfinancial ndreporting nd..................... 20
1-10 Impact ndof nddiffering ndobjectives n d ......................... 20
1-11 Accounting ndpolicy nddisagreement...................... 15
1-12 Accounting ndpolicies ndand ndreporting ndobjectives.. 10
1-13 Policy ndchoicend.................................................... 20
nd nd nd nd nd
nd nd nd nd nd nd nd nd
nd
,Cases
Case nd1-1 nd(LO1.2, ndLO1.3, ndLO1.4, ndLO1.5)
Notes ndfor ndDiscussion ndWith ndElicia:
There ndis nda ndconflict ndof ndinterest ndbetween ndthe ndobjectives ndof ndElicia ndand ndDabika nddue ndto
ndthe ndbuyout ndclause ndin ndthe ndshareholder ndagreement. ndElicia ndwill ndhave nda ndmotivation ndto
nddecrease ndshareholders‘ ndequity ndsince ndthis ndwill ndreduce ndthe ndamount ndthat ndshe ndwill ndbe
ndrequired ndto ndpay ndto ndbuy ndout ndDabika. ndDabika ndwill ndbe ndinterested ndin ndincreasing
ndshareholders‘ ndequity ndto ndincrease ndthe ndamount ndshe ndwill ndreceive. ndIt ndmust ndbe ndclarified
ndwho ndI ndam ndworking ndfor ndsince ndI ndmay ndhave nda ndconflict ndof ndinterest ndsince ndI ndknow
ndboth ndparties.
It n d is n d important n d that n d all n d accounting n d policies n d are n d ‗fair‘ n d to n d both n d sides. n d What n d is n d conside
‗fair‘? ndFrom ndDabika‘s ndperspective, ndfair ndcould ndbe ndaccounting ndpolicies ndconsistent
ndwith ndprior ndyears. ndFrom ndElicia‘s ndperspective, ndfair ndcould ndbe ndif ndthe ndeconomic ndevents
ndchange ndthe ndaccounting ndpolicy ndwould ndchange. ndFair ndcould ndbe ndboth ndsides ndsplit ndthe
nddifference ndwhere ndDabika ndand ndElicia nddisagree ndon ndvalue. ndIn ndthe ndfuture ndit ndis
ndimportant ndthat ndthe ndshareholders ndagreement ndis ndmore ndspecific.
Due ndto ndthe ndchoices ndallowed ndwithin ndGAAP nda ndpolicy ndcould ndbe ndselected ndthat ndwould
ndbe ndmore ndbeneficial ndto ndone ndof ndthe ndparties. ndIt ndis ndassumed ndsince ndthis ndis nda ndsmall
ndprivate ndcompany ndthat ndthey ndare ndusing ndASPE. ndThere ndis ndno ndindication ndthat ndneither
ndElicia ndor ndDabika ndwould ndbe ndusing ndIFRS ndnor ndthat ndthe ndbank ndrequires ndit.
Inventory
Elicia ndwants ndto ndwrite ndoff ndthe ndinventory ndvalue ndfor ndthe ndgarden ndgnomes ndand ndstatues
ndand ndthis ndwill nddecrease ndthe ndamount ndof ndthe ndpayment ndto ndDabika. ndAccording ndto
ndASPE, ndinventory ndwould ndbe ndvalued ndat ndthe ndlower ndof ndcost ndand ndnet ndrealizable ndvalue.
ndEven ndthough ndthis ndinventory ndhas ndbeen ndsitting ndin ndthe ndgardening ndcentre ndthere ndis ndstill
nda ndfew ndbeing ndsold ndeach ndyear. ndThis ndindicates ndthere ndis ndstill ndsome ndvalue ndassociated
ndwith ndthe ndinventory ndand ndtherefore ndit ndshould ndnot ndbe ndwritten nddown ndto ndzero. ndIt
ndshould ndbe nddetermined ndwhat ndthe ndnet ndrealizable ndvalue ndof ndthis ndinventory ndis ndto
nddetermine ndthe ndamount ndof ndthe ndwrite ndoff. ndIf ndit ndis ndall ndwritten ndoff ndand ndthen ndsold ndat nda
ndlater nddate ndthis ndwould ndnot ndbe ndfair ndto ndDabika ndsince ndElicia ndwould ndget ndthe ndbenefit ndof
nda ndreduced ndshareholders‘ ndequity ndand ndthus nda ndlower ndpayment ndrequired ndto ndDabika.
ndThe ndpurchase ndof ndthis ndinventory ndwould ndhave ndbeen nda nddecision ndmade ndby ndboth
ndDabika ndand ndElicia ndso ndif ndthe ndinventory ndis ndunsellable ndthey ndshould ndboth ndbear ndthe
ndimpact ndof ndthis nddecision.
Warranty
According ndto ndASPE ndthe ndaccounting ndpolicy ndis ndappropriate ndand nda ndwarranty ndexpense
ndshould ndbe ndincluded ndfor ndthe ndguarantee. ndThe ndimpact ndis ndthat ndthis ndwould nddecrease
ndshareholders‘ ndequity ndand ndthe ndamount ndof ndthe ndpayment ndto ndDabika. ndThis ndis nda ndnew
ndpolicy ndthat nddid ndnot ndexist nduntil ndthis ndyear. ndThe ndestimate ndof nd5% ndwas ndonly ndbased ndon
ndsales ndfrom ndthe ndfall. ndSince ndit ndis nda ndnew ndpolicy ndthat ndwas ndmade ndby ndElicia ndon ndher
nd nd nd nd nd
nd nd nd nd nd nd nd
nd
,ndown ndit ndmay ndbe ndappropriate ndthat ndthe ndimpact ndof ndthis ndis ndexcluded ndfrom nd the
ndcalculation nd of ndshareholders‘ ndequity. ndAt nd a nd minimum ndthe ndestimate nd should
nd nd nd nd nd
nd nd nd nd nd nd nd nd
nd
, be ndreviewed ndto nddetermine ndif ndit ndis ndreasonable. ndFurthermore, ndthe ndestimate, ndif
ndincluded ndin ndthe ndshareholders‘ ndequity ndcalculation, ndshould ndbe ndagreed ndupon ndby ndboth
ndElicia ndand ndDabika.
Computer ndEquipment
ASPE ndis ndflexible ndin ndthe ndmethod ndused ndto nddepreciate ndassets. ndThe nddeclining ndbalance
ndmethod ndusing nd40% ndwould ndwrite ndoff ndthe ndvalue ndof ndthe ndcomputers ndin ndapproximately
ndtwo ndyears. ndThis ndis ndvery ndfast ndespecially ndfor nda ndsmall ndcompany ndthat ndis ndlikely ndto nduse
nda ndcomputer ndfor nda ndlonger ndperiod ndof ndtime nddue ndto ndlimited ndresources ndas ndcompared ndto
nda ndlarger ndcompany. ndJust ndbecause ndthe ndcomputer ndmay ndbecome ndobsolete ndquickly nddoes
ndnot ndmean ndthe ndbusiness ndwill ndnot ndcontinue ndto ndderive ndbenefit ndfrom ndthe ndcontinued nduse
ndof ndthe ndcomputer. ndThe ndimpact ndof ndhigher nddepreciation ndis nda ndreduction ndin ndthe
ndpayment ndto ndDabika. ndIf ndwe ndlook ndat ndconsistency ndwith ndother ndassets ndit ndwould ndbe
ndappropriate ndto nduse ndthe ndstraight ndline ndmethod. ndWe ndshould ndinquire ndwith ndElicia ndas ndto
ndher ndrationale ndfor ndchoosing nddeclining ndbalance ndinstead ndof ndthe ndstraight-line
nddepreciatoin ndmethod ndused ndfor ndall ndother ndassets ndand nddetermine ndthe nddeclining ndmethod
ndreflects ndthe ndactual ndusage ndof ndthe ndasset nd(i.e. ndmore ndof ndthe ndasset ndused ndearlier ndon).
ndSince ndagain ndsince ndthis ndwas nda nddecision ndmade ndonly ndbe ndElicia ndmaybe ndit ndshould ndbe
ndexcluded ndfrom ndthe ndcalculation ndor ndmaybe ndthe ndpolicy ndshould ndbe ndconsistent ndwith
ndtheir ndother ndassets ndbut ndfurther ndinformation ndis ndrequired.
Case nd1-2 nd(LO1.2, ndLO1.3, ndLO1.4, ndLO1.5)
Dear ndRichard ndWright:
I ndam ndhappy ndto ndrespond ndto ndyour ndquestions ndregarding ndthe ndaccounting ndchanges ndthat
ndthe ndnew ndbanker ndhas ndrequested. ndIt ndis ndimportant ndthat ndyou ndrealize ndthat ndthe ndneeds ndof
ndthe ndbanker ndare nddifferent ndthan ndyour ndneeds. ndThe ndbank ndis ndinterested ndin ndyour ndability
ndto ndmake ndloan ndpayments; ndtherefore, ndthe ndbanker ndwants ndto ndassess ndfuture ndcash ndflows,
ndcollateral ndand ndyour ndability ndto ndpay ndback ndthe ndloan.
First, ndthere ndis ndthe ndissue ndof ndmoving ndto ndthe ndaccrual ndbasis. ndWhile ndit‘s ndtrue ndthat,
ndultimately, ndwhat ndyou ndearn ndis ndthe ndnet ndcash ndin ndyour ndpocket, ndthe ndcash ndbasis ndof
ndaccounting nddoesn‘t ndwholly ndcapture ndall ndof ndthe ndcash ndflows ndthat ndwill ndhappen ndin ndthe
ndfuture. ndYour ndbanker ndwants ndto ndknow ndwhat ndliabilities ndyou‘ll ndhave ndto ndpay ndin ndthe
ndcoming ndmonths nd(and ndyears), ndand ndwhat ndamounts ndyou ndcurrently ndare ndowed ndthat ndwill
ndbe ndcollected ndin ndthe ndfuture ndweeks ndor ndmonths. ndThe ndaccrual ndmethod ndreally ndgives nda
ndclear ndpicture ndof ndfuture nd―cash ndflow‖.
It‘s ndfor ndmuch ndthe ndsame ndreason ndthat ndhe ndwishes ndyou ndto ndshow ndyour ndcattle ndat ndmarket
ndvalue. ndI‘m ndsure ndhe ndrecognizes ndthat ndboth ndyour nddairy ndcattle ndand ndyour ndbreeders ndare
ndintended ndfor n d continued nduse ndand ndare ndnot ndfor ndsale ndin ndthe ndnormal ndcourse ndof
ndbusiness.As ndsaleable ndstock, ndthe ndcattle ndrepresent nda ndpotential ndcash ndresource ndin ndthe
ndevent ndof ndbankruptcy ndor nddefault. ndAfter ndall, ndyou ndprobably nduse ndthe ndcattle ndas
ndcollateral ndfor ndloans, ndand ndhe ndneeds ndto ndknow ndthe ndvalue ndof ndthat ndcollateral.
You ndshould ndnot ndtry ndto ndestimate ndthe ndvalue ndof ndyour ndstock ndby ndyourself. ndFor
ndcredibility, ndyou ndshould ndobtain ndan ndindependent ndestimate. ndThe ndvaluation ndwill ndrequire
nda ndprofessional ndevaluation nd(and ndthe ndcost ndthereof), ndbut ndwill ndbe ndnecessary ndin ndorder
nd nd nd nd nd
nd nd nd nd nd nd nd
nd
