Stephanie Baker is an audit senior with the public accounting firm of Wilson & Lang. It is February Year 9, and the audit of Canadian Development Limited (CDL) for the year ended December 31, Year 8, is proceeding. Stephanie has identified several transactions that occurred in the Year 8 fiscal year that have major accounting implications. The engagement partner has asked Stephanie to draft a memo addressing the accounting implications, financial statement disclosure issues, and any other important matters regarding these transactions.
CDL is an important player in many sectors of the economy. The company has both debt and equity securities that trade on a Canadian stock exchange. Except for a controlling interest (53%) owned by the Robichaud family, CDL’s shares are widely held. The company has interests in the natural resources, commercial and residential real estate, construction, transportation, and technology development sectors, among others.
Required:
Assume the role of Stephanie Baker, and prepare the memo for the partner.