Question

You are the controller of PWC Ltd. PWC Ltd. is a public company with 30% of its common shares traded on the Toronto Stock Exchange; the remaining 70% of shares are owned by members of the PWC family. The CEO would like to take PWC private by re-acquiring and cancelling the 30% of common shares that are currently publicly traded. Once PWC becomes a private company, it will likely switch to ASPE. In preparation for this potential change, you have decided to create a reference document that provides a brief overview of how financial reporting under ASPE would differ from PWC Ltd.’s current accounting approach in each of the following key areas that affect PWC’s financial statements: Investments (PWC currently holds FV-OCI bonds, FV-OCI shares, and FV-NI shares); convertible bonds; mandatorily redeemable preferred shares; defined benefit pension plan; leases (PWC is a lessor for several leases); income taxes; EPS; cash flow statement. For items where ASPE accounting would be substantially the same as IFRS, indicate that this is the case. When ASPE allows for more than one option, describe each option available, indicating which, if any, of these options is substantially the same as IFRS requirements. PWC currently follows IFRS16 and IFRS9. Required: Prepare a draft of the reference document.

Answer 1

answer:

DRAFT OF REFERENCE DOCUMENT :

a total arrangement of money related proclamations incorporate an announcement of monetary position , explanation of exhaustive salary (IFRS), articulation of changes ensury and pay explanation (ASPE), explanation of money streams and fitting note discloser there are some significant contrasts in the required zones according to address;

1.cash stream explanation - in both ASPE and IFRS , The necessities of introduction of articulation of income proclamation are comparable. anyway there is a contrast amongst ASPE and IFRS in connection two characterization different surges and inflows.

under ASPE, there isn't a bookkeeping approach choise on the introduction of intrigue and profits . it has not be considered as a movement on the announcement.

Be that as it may, under IFRS, there is a bookkeeping strategy of characterizing interest and profit . It is included back - identified from the income articulation

2.Leases-under ASPE , fund rent is utilized on indistinguishable way from utilized as capital rent under segment 3065. under ASPE, that is IASI7 doesn't sub isolate fund rents in two deals compose rents and direct financing leases.

notwithstanding, under IFRS16, it requires a rent to perceive attests and liabuluess on the adjusted sheet for most rents . rent enpouse comprises of amortizationof rent declare and enthusiasm on liabulness .

3. characterized advantage annuity plane - under ASPE, IAS19, required the characterized advantage commitment to be decide utilizing a bookkeeping valuation and doesn't allow the utilization of financing valuation .

in any case, when a characterized advantage commitment has affirm in follows of the commitment , IFRIC14 has extra direction with respect to the accessibility of a discount or a decrease in future commitments , the exertion of a base financing prerequisite, and a base subsidizing necessity may offer used to a risk .