Three years ago, Ranchero Corporation purchased a patent for a process used in production, for 3 million. At the end of last year, Ranchero determined the fair value of the patent was greater than its book value. No impairment losses have been recognized on the patent. Assuming Ranchero follows International Financial Reporting Standards, what is the impact on its total asset turnover ratio and return on equity of reporting the value of the patent on the balance sheet at fair value Total asset turnover Return on equity（）① Lower Higher ② Higher Lower ③ LowerLower
A. ①
B. ②
C. ③
参考答案：C
解析：
Increasing the value of the patent on the balance sheet will increase assets and thus decrease the total asset turnover ratio (higher denominator). Increasing the value of the patent will also increase equity, otherwise, the balance sheet equation would not balance. Increasing equity will result in lower ROE (higher denominator). The increase in the value of the patent is not recognized in the income statement unless it is reversing a previously recognized write-down.