Discuss the usefulness to investors of the ROE ratio

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Question - Discuss the reasons why an entity may choose a particular accounting policy where an International Financial Reporting Standard allows an accounting policy choice and whether faithful representation and comparability are affected by such choices.

i. Discuss the usefulness to investors of the ROE ratio and its component parts provided above and calculate these ratios for the years ended 31 December 2019 and 2020. These calculations should be based upon the information provided in table 1.

ii. Discuss the impact that the setting up of the SPE and miscellaneous transactions have had on ROE and its component parts. Given these considerations, adjust table 1 and recalculate the ROE for 2020 thereby making it more comparable to the ROE of 2019.

Reference no: EM133041043

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