Comparison of Aspe for Ifrs - 3356 Words

Accounting Standards in Transition | A Comparison of IFRS and ASPE in Canada | | | | TABLE OF CONTENTS Executive Summary III Part I Key Differences between IFRS and ASPE 1 I. Frameworks for Financial Reporting 1 II. Form and Components of the Required Financial Statements 1 III. Revenues and Expenses Recognition 2 IV. Errors, Changes in Estimates, and Changes in Accounting Policies 2 V. Cash and Receivables 3 VI. Inventories 3 VII. Financial Assets 3 VIII. Property, Plant, and Equipment 4 IX. Intangible Assets, Goodwill, Mineral Resources, and Agriculture 4 X. Applications of Fair Value: Revaluations, Impairments, and Non-current Assets Held for Sale 4 XI. Current Liabilities 5 XII. Contingencies†¦show more content†¦In summary, IFRS is more restrictive of assets than ASPE and more encompassing of liabilities than ASPE. It results in the equity section under IFRS being reported more conservatively than under ASPE (CICA, 2011, Section 1000). III. Revenues and Expenses Recognition The key difference of revenues and expenses recognition is obvious. According to IFRS, the income statement records the increasing of future economic benefit as revenues, such as sales, interests, dividends, and rents, and the recognition of revenues and expenses are combined directly in the same transaction (Matching principle). But ASPE standards state that the income statement only records the existing or realizing performance as revenues. Same situation in the expenses, in IFRS’s income statement, they are recognized by a decrease in the asset or an increase in the liability for future position. In addition, under ASPE, we do not recognize an expense as a provision unless the benefit does qualifies as an asset (CICA, 2011, Section 1000). IV. Errors, Changes in Estimates, and Changes in Accounting Policies Under IFRS, a full retrospective restatement is required to correct the prior period error, unless it is impracticable to determine the period-specific effects. For ASPE, a private enterprise is allowed to make the correction on the error on each specific prior period. Under IFRS, the recognition of changes in accounting estimates affects the future period. If theShow MoreRelatedSolving The Financial Issues Of Watering Can Inc. Essay2597 Words   |  11 PagesBank is the secondary user of Watering Can Inc.’s financial statement, as they are getting lots of interest out of the WCI’s net income. Satisfying the Small Bank is more important goal to satisfying Jack, as it is more stable source of loan in comparison to Jack, who can always take away the loan at any time. The objective of the Small Bank through financial statement is to see the maximized net income, which is opposed to the objective of the primary user, the Parkers. Me, as a CPA cannot satisfyRead MoreCma Mock Exam Solution19872 Words   |  80 PagesROI of 14.0%. Certified Management Accountants of Ontario Page 33 (60 pages) Fall 2011 – Mock Entrance Examination 1 64. Answer: a Residual income (RI) is an absolute measure (i.e. dollars) which makes it difficult to make direct comparisons across divisions because the level of investment of the various divisions may differ. ROI is a percentage, which is a common statistic used for comparative purposes. Distractors: b) Both ROI and RI consider both profits and investments. c) BothRead MoreTopic: Performance Management6978 Words   |  28 Pagesstatement to determine cash needs; 6. Looking at different short-term investment strategies as a means to effectively utilize excess cash; 7. Examining the effectiveness of internal control systems within an organization; 8. Reporting results using IFRS, ASPE or a disclosed basis of accounting; and 9. Analyzing a company’s various product lines. Management accountants are often called upon to provide the analysis required for pricing decisions, such as cost-volume-profit, product costing, expectedRead MoreFriedlan 4e Accounting Chapter 3 Solution28374 Words   |  114 Pageshave on deposit. Q3-18. An executory contract is an exchange of promises where one party promises to supply goods or services and the other party promises to pay for them, but neither side has yet fulfilled its side of the bargain. Under IFRS (and ASPE) these arrangements are not usually recorded in the accounting system. Q3-19. The things that must be known are: 1. Which elements of the accounting equation are affected? 2. Which specific asset, liability, owners’ equity, revenue, and