Solution manual for modern advanced accounting in canada 9th edition hilton murray.

COMPLETE SOLUTION MANUAL FOR MODERN ,y ,y ,y ,y




ADVANCED ACCOUNTING IN CANADA 9TH
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EDITION HILTON MURRAY,
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HERAUF DARRELL
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Chapter 1 ,y




Conceptual &Case Analysis ,y ,y ,y ,y




Frameworks for Financial Reporting ,y ,y ,y




A brief description of the major points covered in each case and problem.
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,y CASES

Case 1-1 ,y




In this case, students are introduced to the difference in accounting for R&D costs between
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,y IFRS and ASPE and asked to provide arguments to support the different standards.
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Case 1-2 ,y , y (adapted from a case prepared by Peter Secord, Saint Mary’s University)
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In this real life case, students are asked to discuss the merits of historical costs vs. replacement
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,y costs. , y Actual note disclosure from a company’s financial statements is provided as
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,y background material. ,y




Case 1-3 ,y , y (adapted from a case prepared by Peter Secord, Saint Mary’s University)
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Copyright © 2019 McGraw-Hill Education. All rights reserved.
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Solutions Manual, Chapter 6
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,A Canadian company has just acquired a non-controlling interest in a U.S. public company. It
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,y must decide whether to use IFRS or U.S. GAAP for the U.S. subsidiary. Financial statement
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,y information is provided under IFRS and U.S. GAAP. The reasons for some of the differences
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,y in numbers must be explained and an opinion provided as to which method best reflects
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,y economic reality. ,y




Case 1-4 ,y




This case is adapted from a CPA Canada case. A private company is planning to go public.
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,y Analysis and recommendations are required for accounting issues related to purchase and
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,y installation of new information system, revenue recognition, convertible debentures and
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doubtful accounts receivable.
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Case 1-5 ,y




This case is adapted from a CPA Canada case.
,y ,y ,y ,y ,y ,y ,y ,y , y A private company is planning to transition
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, y from ASPE to IFRS. Analysis and recommendations are required for accounting issues related
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,y to convertible debentures, unusual item, revenue recognition, contingency and impairment.
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Copyright © 2019 McGraw-Hill Education. All rights reserved.
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2
,y Modern Advanced Accounting in Canada, Ninth Edition ,y ,y ,y ,y ,y ,y

,PROBLEMS

Problem 1-1 ,y (40 min.) ,y




A single asset is acquired. Students are asked to prepare and compare financial statement
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,y numbers during the life of the asset using both a historical cost and a current value model.
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Problem 1-2 ,y (40 min.) ,y




Details of a European company that reports using IFRS are given along with specific details
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,y relating to certain account balances.
,y ,y ,y ,y , y Students are asked to show how these balances should
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, y be reported under 1) ASPE and 2) IFRS using the facts provided. Students are also asked to
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,y reconcile Net Income and Shareholders` Equity from IFRS to ASPE.
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Problem 1-3 ,y (50 min.) ,y




A private company plans to convert to IFRS go public within 5 years. It wants to know the
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, y impact on net income and shareholders’ equity if it converts from ASPE to IFRS for impaired
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,y loans, interest costs, actuarial gains, compound financial instrument and income taxes.
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Problem 1-4 ,y (50 min.) ,y




While taking the role of a financial analyst, the student uses vertical and horizontal analysis and
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,y ratios to analyse and interpret the profitability, solvency and liquidity of a private company.
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Problem 1-5 ,y (25 min.) ,y




A private company plans to convert to IFRS. It wants to know the impact on three key ratios if it
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,y converts from ASPE to IFRS for impaired loans, capitalization of interest and actuarial
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,y gains/losses.


Problem 1-6 ,y (50 min.) ,y




A private company plans to convert from ASPE to IFRS and wants to know the impact on three
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,y key ratios if it converts from ASPE to IFRS for impairment losses, convertible bonds and
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,y income taxes. ,y




Copyright © 2019 McGraw-Hill Education. All rights reserved. ,y ,y ,y ,y ,y ,y ,y



Solutions Manual, Chapter 6 ,y ,y ,y 3

, SOLUTIONS TO REVIEW QUESTIONS ,y ,y ,y




1. There are times when external users may want financial reports that do not follow GAAP.
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, y For example, users may need financial statements using non-GAAP accounting policies
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,y required for legislative or regulatory purposes, or for contract compliance. A prospective
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,y lender may want to receive a balance sheet with assets reported at fair value rather than
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,y historical cost. Accountants have the skills and abilities to provide financial information in a
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,y variety of formats or using a variety of accounting policies. When the financial statements
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,y use non-GAAP accounting policies, the accounting policies must be disclosed in the notes
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, y to the financial statements. The accountant’s report would make reference to these
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,y accounting policies. ,y




2. The three main areas where judgment needs to be applied are as follows:
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- Choosing accounting policies that are appropriate for the company’s situation
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- Making estimates to accurately reflect the company’s financial position and
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, y results of operations , y ,y




- Deciding what to disclose and how to disclose it in the notes to the financial statements.
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3. The GAAP-based financial statements are prepared primarily for the benefit of external
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,y users. The financial statements provide a summary of the financial position and results of
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,y operations for the company. Management has access to the detailed information available
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,y within the company. Therefore, the formal financial statements should give priority to the
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,y needs of the external users. ,y ,y ,y ,y




4. The main reason the Accounting Standards Board decided to create a separate section of
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,y the CPA Canada Handbook for private enterprises was to address the cost/benefit
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,y discrepancy with respect to smaller private companies’ ability to comply with GAAP. GAAP
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,y has become increasingly complex and for smaller private enterprises this often means that
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,y the cost of complying with such requirements outweighs the benefit received from
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,y compliance. , y In 2002, the AcSB adopted differential reporting, which allowed private
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,y enterprises choices with the respect to certain complex accounting standards (e.g. the
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, y option to use the cost method for investments that would otherwise require the equity
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,y method). In 2009, the AcSB decided to create a self-contained set of standards for private
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,y enterprises. These standards were effective for fiscal periods beginning on or after January
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,y 1, 2011.
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5. There are a few reasons why a private company would want to comply with
, y , y , y , y , y , y , y , y , y , y , y , y , y , y IFRS even
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though it is not required to do so. ,y ,y ,y ,y ,y ,y ,y , y It may have plans to become publicly listed at some point
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Copyright © 2019 McGraw-Hill Education. All rights reserved.
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4
,y Modern Advanced Accounting in Canada, Ninth Edition ,y ,y ,y ,y ,y ,y