Homework Answers
(a) IFRS - In this case, a provision for contingent liability should be recorded in the balance sheet. It is because the negative outcome is probable and the liability can be estimated.
ASPE - The answer will remain the same even if its a Private Co. falling under ASPE.
(b) IFRS - Since the outcome cannot be determined, the pending lawsuit should be disclosed in the footnotes of financial statements.
ASPE - The answer will remain the same even if it is a private company falling under ASPE.
(c) IFRS - Since it is anticipated that the lawsuit will not be lose, the company should not give any disclosure in financial statement.
ASPE - As per section 3290, if an obligation exists but cannot be recognised, it should be disclosed. Hence, in this case, we need to disclose in the footnotes to financial statements.
(d) IFRS - As per IFRS 9, a financial guarantee should be recorded in books of account, even if the subsidiary co. has a rating of AA.
ASPE - The answer will remain the same even if it is a private company falling under ASPE.
(e) IFRS - Since the negative outcome is likely to happen but the estimate cannot be done, we need to give a disclosure in the footnotes of financial statements.
ASPE - The answer will remain the same even if it is a private company falling under ASPE.
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