Plaid Robots Inc. is a small, privately held corporation that had a great first year of operations. Management is considering taking the company public in the next three to five years. Since this is its first year of operations, its CEO, Pete Seckler, must now ask the accounting department to prepare its year-end financial statements. He still hasn't decided if the company will report using accounting standards for private enterprises (ASPE) or international financial reporting standards (IFRS). Pete has heard that there is "more" disclosure needed if the company follows IFRS but does not know what that means. Since he is not an accountant, he would like to see the shareholders' equity section of the balance sheet for this company prepared under both ASPE and IFRS to see for himself what all the fuss is about.
The following information is available to you to prepare the comparison:
• 250,000 Class A common shares were issued and outstanding at $5 each. There are 1,000,000 authorized Class A shares.
• 400,000 Class B common shares have been authorized but none have been issued.
• 10,000 preferred shares issued and outstanding at $10 each, 50,000 authorized
• Net income for the period May 1, 2013 to April 30, 2014 was $110,000
Required
1. Prepare the shareholders' equity section of the balance sheet as it would be presented under ASPE. Use the minimum acceptable disclosure.
2. Prepared the shareholders' equity section of the balance sheet as it would be presented if Plaid Robots reported under IFRS.
3. Would IFRS allow another presentation than what you have shown in Requirement 2?