Explorer

The issuer reported an equity-method investment in an investee whose fiscal year end was six months earlier than the issuer's. The firm did not test any transactions or the investee's financial information for the six-month period between the investee's and the issuer's fiscal year ends. (AS 2503.28)

The issuer held investments without readily determinable fair values that were recorded at cost less impairments. The following deficiencies were identified: · For another of these investments selected for testing the issuer identified factors that may have indicated an impairment loss was present but concluded that the investment was not impaired based on a sensitivity analysis it prepared for certain of these factors. The firm did not perform any procedures to test this sensitivity analysis and evaluate the other potential impairment factors that were identified by the issuer. (AS 2503.48)

The firm did not perform procedures to test the fair values of certain of the issuer's investments. (AS 2502.15)

The firm did not test the fair values of certain investments. (AS 2502.15)

The issuer did not consider unrealized losses on certain investments to be other-than-temporary due to its ability to hold these investments until the recovery of fair values. The firm did not evaluate the issuer's ability to hold the investments for a period of time sufficient to allow for the anticipated recovery in fair value. (AS 2503.48)

The firm did not perform procedures to test the fair value of certain Level 2 investments beyond comparing the fair value to the pricing source used by the issuer. (AS 2502.26 and .28)

The issuer determined the fair value of an investment using projected cash flows of the investee company. The following deficiencies were identified: · The issuer determined the revenue projections underlying these cash flows by multiplying for each of the investee company's two products the quantities of units projected to be sold by an estimated selling price. For one of these products the firm did not evaluate the reasonableness of the projected quantities of units to be sold beyond inquiring of the investee company's management and comparing the current-year projected revenue for the investee company to actual revenue. (AS 2502.26 .28 and .31)