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It is March 15^th. You are auditing the 10-K of Broad Financial Insurance Group (BFIG). BFIG is a small, publicly traded company that does not meet the requirements for accelerated filing. Your review is the final review prior to their submission to the SEC.

BFIGs CEO, B. Kirkland idolizes Warren Buffet and BFIG follows the model of Berkshire Hathaway, just on a much smaller scale. Approximately 25% of BFIGs assets are equity securities, accounted for under the fair value method. BFIG also owns 30% of Key West Restaurant Corp., with the equity method used to account for the investment. BFIG did not elect the fair value option at the time of acquisition of Key West Restaurant Corp, and the investment in Key West represents 10% of BFIGs assets. Key West Restaurant Corp. operates tropical themed casual dining/bars in shopping malls along the east coast.

BFIG released earnings on February 10^th. . Earnings in 2020 increased by more than 10% from 2019 driven in large part by the growth in market values for equity securities. In the earnings release, BFIG discussed the success of their investment strategy, and the success of their insurance operations. While most of BFIGs investments recovered after falling nearly 40% during the late first/early second quarter of 2020, Key West Restaurants Corp. is struggling.

Key West posted a loss in 2020 due to partial closures and reduced capacity resulting from pandemic related restrictions. BFIGs financial statements reflect their proportional share of Key Wests loss. The financial troubles at Key West are continuing during 2021. Further, Key West has substantial debt and a large portion is due in July 2021, and the company will need additional financing to meet the obligation, raising a going concern issue.

In their 10-K, BFIG discusses the success displayed in their 2020 results and has general wording regarding the risks associated with investing in equity securities in the Management Discussion & Analysis (MD&A) section.

Your manager, Peter Peterson, has requested that you research subsequent event disclosures.

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