Question

Puma Paper Company Ltd. operates a 300-tonne per-day kraft pulp mill and four sawmills in New Brunswick. The company is expanding its pulp mill facilities to a capacity of 1,000 tonnes per day and plans to replace three of its older, less efficient sawmills with an expanded facility in three years' time. The fourth mill did not operate for most of 2014 (current year), and there are no plans to reopen it before the new sawmill facility becomes operational. The Board of Directors has approved a plan to sell this mill and is actively seeking a buyer.
In reviewing the depreciation rates and in discussing the residual values of the sawmills that are to be replaced, it was noted that if present depreciation rates were not adjusted, substantial amounts of plant costs on these three mills would not be depreciated by the time the new mill is operational.
Instructions
What is the proper accounting for the four sawmills at the end of2014 under ASPE? Under IFRS?


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  • CreatedSeptember 18, 2015
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