Using the consolidated financial statements of Surfstitch Ltd, comparing the 2015 and 2016 Annual Reports comment on:
- The recent financial predicament facing Surfstitch Ltd.
- The 2015 Goodwill, The Investment in Subsidiary, the cash position and
- The 2016 Profit and Loss Statement with particular reference to Impairment costs, Selling & Distribution and Administrative expenses.
- Based on your analysis, and BEFORE knowledge of the recent share price decline and share trading halt, would you have recommended to your clients to buy, hold or sell Surfstitch shares? Why?
After reading the attached documents, newspaper articles and research papers, answer the following question:
Why is it necessary to have a continuous reporting regime for disclosure entities and is it effective? Do you agree? Why or why not?