tora Enso is a Finnish pulp and paper manufacturing company. It discloses in its 1999 consolidated Annual Report, the following items:Excerpted from the Consolidated balance sheetAssets€...

tora Enso is a Finnish pulp and paper manufacturing company. It discloses in its 1999 consolidated Annual Report, the following items:Excerpted from the Consolidated balance sheetAssets€ mill.19991998Shares, associated companies165.5334.1Shares, other companies280.4128.8In the notes to its financial statements, the Stora Enso provides explanations relating to these two items:Excerpts from the notesNote 12 Associated companies€ mill.19991998Historical cost Jan. 1289.9273.1Translation difference1.8-14.8Additions20.242.3Disposals-36.8-1.2Transfers to other companies-141.9-9.4Historical cost Dec. 31133.2290.0Equity adjustments to investments in associated companies Jan. 144.244.8Equity earnings in associated companies9.710.0Translation difference-27.3-0.1Dividends received during the year-3.1-7.2Taxes-2.4-2.6Disposals and other changes11.2-0.7Equity adjustments Dec. 3132.344.2Carrying value of investments in associated companies on Dec. 31165.5334.2Note 14 Shares in other companies€ mill.19991998Acquisition cost Jan. 1128.857Translation differences0.5-1.1Additions13.468.8Disposals-7.1-4.8Write-downs3-0.5Transfers from associated companies141.99.4Carrying amount Dec. 31280.4128.8In addition, the company explains in the notes that “associated companies (voting rights between 20% and 50%) are consolidated using the equity method” and “the income statements of foreign subsidiaries are translated into Euros using the average rate for the accounting period. The balance sheets of foreign subsidiaries are translated using the rate prevailing on the balance sheet day.”Pechiney, a French group operating worldwide in aluminum and packaging materials, discloses in its 1999 Annual Report the following note:Note 7 – Investments in Equity Affiliates(in millions of €)199919981997Beginning of period334337354Changes:- Equity in net income of Quensland Alumina Limited, Pechiney Reynolds Québec Inc. and in partnerships7710- Equity in net income of other affiliates411020- Dividends received from equity affiliates(12)(12)(20)- New investments or share capital increases--42- Divestments and reduction in ownership percentage(73)-(71)- Change from equity method to consolidation--(9)- Change from consolidation to equity method457-7- Translation adjustment22(10)5- Other12(1)End of period777334337RequiredA) Using the Stora Enso dataAssociated companies: explain the computation of the historical cost at year-end and the meaning of each component of this computation.Where will be found, other than in the notes, the carrying value of associated companies at year-end?Other companies: explain the computation of carrying amount at year-end and the meaning of each component of this computation.Double-check the carrying value of other companies at year-end. What is the usefulness to an investor or shareholder of the 1999 figure of €280.4 millions shown both in the balance sheet and in the notes?B) Comparison: notes 12 and 14 in Stora Enso’s annual report and note 7 in Pechiney’s annual report have the same purpose. Compare and contrast the computations and reporting choices made by each company.