A friend of yours, a non-accounting student in the JRSSB, has asked for your advice about a potential investment. Your friend is considering purchasing shares in Aurora Cannabis Inc., a company with its head office in Leduc, Alberta, that is publicly traded on the Toronto Stock Exchange and other exchanges (symbol ACB). The company's primary business is the production, distribution, and sale of cannabis related products in Canada and internationally. Your friend thinks this company might be a good investment, as the share price is quite low, but is not sure how to interpret certain parts of the financial statements. In particular, your friend has read note 9 (Biological Assets) and is having difficulty understanding the meaning of this information. (The note disclosure is included as an appendix to this document.) Required: Write a memo to your friend that answers the following questions about the Aurora Cannabis Inc. financial statements. (30 marks) 1) How does the accounting for biological assets differ from the accounting for other inventory items? 2) How does Aurora Cannabis determine the stage of completion for cannabis plants? Does any part of this calculation involve estimation? 3) What inputs and assumptions are used to determine the fair value of cannabis plants? 4) On which level of the fair value hierarchy are the inputs and assumptions categorized? What does this indicate about the reliability of the information? 5) Why does the company provide a sensitivity analysis of the significant inputs/assumptions? 6) What is the difference between propagation plants and cannabis plants? 7) What percentage of the total value of assets available for transfer to inventory results from biological transformation? (You may find it useful to present a chart similar to the one we used in class on 15 February to analyze the HEXO example. Make sure your chart includes both years' data.) What is the cause of this change in value due to biological transformation? 8) Provide a general conclusion to your friend about the role of measurement uncertainty in the valuation of biological assets and the impact on risk from the perspective of an investor.