At a recent conference on financial accounting and reporting, three participants provided examples of similar accounting changes that they had encountered in the past few months. They all involved the current portion of long-term debt. 

1. The first participant explained that it had just recently come to her attention that the current portion of longterm debt was incorrectly calculated in the past three years of her company's financial statements due to an error in an accounting software product. 

2. The second participant explained that his company had just decided to change its definition of what is “current” to make it closer to the “operating cycle,” which is approximately 18 months. The company had been using “12 months from the statement of financial position date.” 

3. The third participant said that her company has decided to change from a “12 months from the statement of financial position date” definition to one based on the company's operating cycle, which is now close to two years. She explained that the company's strategic plan over the past three years had moved the company into bidding on and winning significant longer-term contracts and that the average life of these contracts has now lengthened to about two years. 

Instructions 

As a panellist at this conference who is expected to respond to the participants, prepare a brief report on the advice you would give regarding how each situation should be handled under IFRS. Identify what steps each participant should take and what disclosures, if any, would be required.