Commencing in 2007 foreign companies that were using IFRSs did
Commencing in 2007, foreign companies that were using IFRSs did not have to reconcile their reported profit to profit under U.S. GAAP. Access the 2011 and 2010 annual reports for Cenovus, a Canadian oil company. Answer the questions below for each of the two years. Round ratios to two decimal points. For each question, indicate where in the financial statements you found the answer, and/or provide a brief explanation.
(a) In what currency are the financial statements presented?
(b) GAAP from what country or jurisdiction was used in preparing the financial statements?
(c) What was the percentage difference in reported net earnings under Canadian GAAP versus net earnings under U.S. GAAP?
(d) What three items, other than income taxes, caused the biggest change in net earnings between the two different GAAPs?
(e) If a reconciliation to U.S. GAAP were not provided, how would a financial analyst deal with this situation when comparing Cenovus to another company reporting under U.S. GAAP?
(f) What was the percentage difference in reported net earnings under Canadian GAAP versus net earnings under IFRSs?
(g) What three items, other than income taxes, caused the biggest change in net earnings between the two different GAAPs?
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