Given what I have read about financial statements, they could still be correct in spite of the

differences in the way that Ron has seen them reported in Canada vs. in Western Europe. Based on what
I have read, the differences in the financial statements could potentially be attributed to the different
accounting standards that each country would be following.

In Canada, enterprises will either follow International Financial Reporting Standards (IFRS) or
Accounting Standards for Private Enterprises (ASPE). If Wilson Bros. followed IFRS, then the financial
statements, then the financial statements should be largely the same given that countries in Europe also
follow IFRS. In this scenario, there may only be minor differences with regards to tax, given that the tax
laws in different jurisdictions may be different.

However in Ron’s case, he indicated that the financial statements are “nothing like he’d ever
seen before”, and as such it may be reasonable to assume that the financial statements produced in
Western Europe compared to those produced in Canada follow different accounting standards. In
Canada, private companies can follow ASPE, which is different from IFRS in that it requires less
information. As well, the titles for some of the financial statements are different—for example, what is
the statement of change in equity under IFRS is the statement of retained earnings. Regardless of the
frameworks, however, the financial statements could still be correct.

With respect to Ron’s main question regarding whether they are profitable, perhaps he is
unable to tell given the differences in the income statement. One of the main differences regarding the
income statement between ASPE and IFRS is that under IFRS is that it is called the statement of
comprehensive income and includes sources of comprehensive income and also reports Earnings Per
Share, while income statements under ASPE does not report either of these.

In conclusion, the differences in accounting standards could be the reason that Ron is unable to
read the financial statements in Western Europe, and although they are different, they could still be
correct.