the management of wpb ltd has spent the past year reorganizing the companys business activities the company is a service provider to hospitals/

Items of Concern
1. In the last quarter of the year, we struck a deal with LaidLow Corporation to take over the ambulance service division that we had acquired in 20X4 from Asper Inc. for $ 12 million. The deal will not be finalized until 15 March 20X8, dependent on the results of Laidlow’s due diligence inspection. We have operated the division as a separate unit, reporting directly to senior management. We struck the deal on 17 August 20X7. At that time, we estimated that the fair value of the division’s assets was $ 24 million, of which $ 7 million is current assets, mainly billings receivable from the hospitals and other agencies for which we provided service. We estimated that the fair value of the $ 17 million noncurrent assets was $ 14 million at the end of the third quarter, 30 September 20X7, and we wrote the noncurrent assets down to that amount. Now, at 31 December, we have good reason to believe that the noncurrent assets are worth $ 16 million.
2. We also sold off some of our laboratory facilities to HealthCom Limited. HealthCom paid the purchase price of $ 5 million in its shares. The value of the HealthCom shares at the end of 20X7 was $ 5.5 million. We do not intend to hold these shares over the long term.
3. Our facilities in the nation of Albageria were confiscated by the government after a coup, and we had to terminate our operations in that country. The facilities cost us $ 3 million to establish and were carried on our books at $ 2.7 million at the time of the confiscation. We estimated that the value of the facilities at the date of the confiscation was $ 4.3 million. We received compensation of $ 4.0 million from the Canadian federal government’s Export Development Corporation (EDC), which had provided us with “political risk” insurance.
4. We have billings receivable of US$ 13 million from African countries (not including Albageria). The billings are in U. S. dollars. We have arranged hedges for 90% of that amount. The Canadian dollar equivalent of the receivables at the time of billing was Cdn$ 14.4 million. At 31 December 20X7, the receivables were the equivalent of $ 15.3 million.
5. As the result of our restructuring activities during this past year, we estimate that we will have to make severance payments and give resettlement allowances of approximately $ 2.5 million during 20X8. The amount may vary up or down by $ 0.6 million, depending on whether our estimate of voluntary early retirements is correct.
6. We have guaranteed the operating lines of credit of several international agencies that co- operate with us in providing services abroad. The total amount of the guarantees varies, of course, because the draw on the credit lines fluctuates. At year- end 20X7, I would estimate that our total guarantees come to about $ 4.2 million. We do not expect any of these agencies to default on their credit obligations, however.