EXERCISE 11-1 Component Depreciation LO2

The following entries would be recorded assuming either U.S. GAAP or IFRS is used.

U.S. GAAP
Asset 127,000
Cash 127,000
IFRS
Building Electrical systems 12,000
Building Roof 15,000
Building Other 100,000
Bank/Liability 127,000

The entry to record depreciation expense would be:

Part A: Depreciation expense

U.S. GAAP
Depreciation 2,500
Accumulated Depreciation $2,500

Part B: Depreciation expense

IFRS
Depreciation Building Electrical Systems 600
Depreciation Building Roof 1,000
Depreciation Building Other 1,825
Accumulated Depreciation Building $3,425


EXERCISE 11-2

Some examples from the webpage are:

Date: August 14, 2014

World Standard-setters meeting programme available: A draft programme has been released for
the upcoming World Standard-setters meeting, which is being held in London on September 29-
30, 2014.

Date: August 13, 2014

IASB Vice-Chairman calls global accounting standards inevitable: IASB Vice-Chairman, Ian
Mackintosh gave a speech today at the IFRS Foundation conference in Johannesburg, South
Africa on the achievability of global accounting standards. He discussed the progress the IASB
has made and the dangers of convergence over adoption.

Date: August 13, 2014

UK Financial Reporting Lab publishes report on clear and concise reporting: The United
Kingdom Financial Reporting Council (FRC) has published a report of its Financial reporting
Lab highlighting the progress that UK companies made during the 2013-year-end reporting
cycle towards clearer and more concise reporting. Although focused on the UK financial
reporting requirements the observations and recommendations in the report are broadly
applicable.

Date: August 13, 2014

Former IFRS Advisory Council Chair reflects on Canadas changeover to IFRSs: In an article in
the CPA Magazine made available on the CPA Canada website, Paul Cherry, former Chairman
of the IASBs IFRS Advisory Council reflects on Canadas changeover to IFRS eight years after
the Canadian Accounting Standards Board (AcSB) decided to adopt international reporting
standards in Canada.


PROBLEM 11-2

IFRS Income Statement and Terminology Differences LO2

A. On the income statement, the first two lines in Unilevers income statement are Turnover and
then Operating profit. What does the term Turnover mean? Which costs are typically reported
between Turnover and operating profit?

The term turnover means revenues or sales while used internationally. The items which are
typically reported between turnover and operating profit and recorded in the footnotes would be
cost of sales, administration expenses as well as distribution and selling costs.

B. How useful is Unilevers income statement presentation considering that this information
about expenses is disclosed in footnote 3 rather than being reported on the face of the income
statement?

It is fairly useful but only if Unilever provides more than just a summary financial statement for
their users. It would depend on who Unilevers users of their statements are and whether or not
the users require specific expenses to be displayed on the income statement as specific line items
vs. being disclosed in the footnotes.


Exercise 12-6

Part A Accounts Receivable Amount

SLS, Inc. (denominated in $) 200,000
TNT, Ltd. 192,660

Accounts Payable

AGT 276,660
SDS, Ltd. (denominated in $) 160,000


Part B Receivable Payable
SLS, Inc. TNT, Ltd. AGT SDS, Ltd.
Transaction date 200,000 195,780 294,000 160,000
Balance sheet date 200,000 192,660 276,000 160,000
Transaction gain (loss) $ 0 $5,120 $18,000 $ 0


Exercise 12-8- Please type in all journal entry transactions with amounts

Nov. 1 Receivable from Exchange Dealer 131,700
Dollars Payable to Exchange Dealer 131,700

Dec 31 Receivable from Exchange Dealer 5,050
Exchange Gain 5,050

31 Exchange loss 5,050
Firm Commitment 5,050

May 1 Exchange loss 7,200
Receivable from Exchange Dealer 7,200

1 Firm Commitment 7,200
Exchange Gain 7,200 7,200

1 Dollars Payable to Exchange Dealer 131,700
Investment 129,550
Receivable from Exchange Dealer 129,550
Cash 131,700

1 Merchandise Inventory 131,700
Investment 129,550
Firm Commitment 2,150









Problem 12-8

December 1, 2009

Option to sell Francs 6,000
Cash 6,000

December 31, 2009

Option to sell Francs 3,000
Exchange Gain Other Comprehensive Income (balance sheet equity) 3,000
(To record a gain on the change in option value)

February 25, 2010

(3) Option to sell Francs 3,000
Exchange Gain Other Comprehensive Income 3,000

(4) Cash 240,000
Option to sell Francs 12,000
Payable to Option Trader 228,000
(To exercise the option and settle with the trader)