Financial Report Of Loewen Group Inc.

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the other employees. L.G.I. provides many services to its acquired
companies including offering training to new employees on its management
information systems and covering costs for any renovations which are needed on
the acquired locations. Each funeral home and cemetery is operated as a
distinct profit centre, with monthly and annual financial performance monitored
by regional and corporate management in accordance with budgeted projections.

This report includes a study of The Canadian Funeral Services Industry
practices, a review of the take-over attempt by Service Corporation
International, an analysis of the Loewen Group Inc. 1995 Annual Report for the
period ending December 31, 1995, and examination of the revenue recognition
practices used by L.G.I..

The Funeral Services Industry

According to a paper issued in August 1995, by Statistics Canada's Services,
Science and technology Division Final Purchase, Growing Demand: The Canadian
Funeral Services Industry, ...

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to US $125 million with the condition that there would be no significant
change in assets or increases in dividends without prior notification to the
court and the other party. No provision on was made on the financial statement
at this point since the result was hard to predict on the appeal. On January
29th, 1996, Loewen settled the lawsuit for US $175 million and recorded US $135
million, present value of $175 million.

Loewen decided to settle because of two reasons: the first is that the
appeal would have a financial impact on the company's income and the second
reason is that prolonging the lawsuits would create uncertainty and speculation
amongst the company's ...

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