Page 361 - SBR Integrated Workbook STUDENT S18-J19

Analysis and interpretation

Example 1

Ratios

Pigeon has issued a financial instrument and has classified it as equity. Under
the terms of the agreement, Pigeon has a contractual obligation to pay fixed
annual dividends.

Discuss the impact on the financial statements of the above error. Your
answer should make reference to financial statement ratios.

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