Burton Howard, CFA, is an equity analyst with Maplewood Securities. Howard is preparing a research report on Confabulated Materials, SA, a publicly traded company based in France that complies with IFRS. As part of his analysis, Howard has assembled data gathered from the financial statement footnotes of Confabulated’s 2009 Annual Report and from discussions with company management. Howard is concerned about the eff ect of this information on Confabulated’s future earnings. Information about Confabulated’s investment portfolio for the years ended 31 December 2008 and 2009 is presented in Exhibit 1. As part of his research, Howard is considering the possible effect on reported income of Confabulated’s accounting classification for fixed income investments.
*All securities were acquired at par value.
In addition, Confabulated’s annual report discusses a transaction under which receivables were securitized through a special purpose entity (SPE) for Confabulated’s benefit.
Th e balance sheet carrying value of Confabulated’s investment portfolio (in € thousands)
at 31 December 2009 is closest to: