Question

VI. Communication: For this part of the assessment, you will prepare memorandums to upper management addressing certain scenarios or situations.

A. As the controller of Target Corporation, compose a memo to the CEO addressing the advantages and disadvantages of transitioning from GAAP to IFRS.

B. As the controller of Target Corporation, compose a memo to the CEO addressing the following scenario: Your biggest customer has just gone bankrupt, and you must inform the CEO how this will affect your accounts receivable. Assume that the accounts receivable balance is at least $100,000.

Answer 1

A.

Business Memorandum

Date 10th January, 2018

To CEO xyz

From Controller Name with Designation

Subject Pros and cons due to the transitioning from GAAP to IFRS

Advantage of the same tranisition from GAAP to IFRS are as follows

1. IFRS focuses more on investors

2. Loss recognition timleness

3. Standardisation of accounting and financial reports

4. Improved cnsistency and transperency of financial records

5. Improved comparability of financial records with global competiotors

6. Better access to foreign capital and markets

Disadvantage of the same tranisition from GAAP to IFRS are as follows

1. The main and farmost disadvantage of the same is the integration problem

2. International soverginity issues

3. Negative effects on US smal entities

B.

Business Memorandum

Date 10th January, 2018

To CEO xyz

From Controller Name with Designation

Subject Bankruptcy of ABC customer, creating a wide loss of $100000/-

Sir due to declaration of bankrupt by the apex court of ABC our account receivable will go down at a sudden since we have to writte off the balance of ABC customer.

It will also impact the Shareholder as it affects the profitability of the company and also at a sudden asset balance goes down by $100000.

Now looking forward to take your guide for the same and what we need to perform.