For each of the following independent situations, indicate whether or not the cost constraint should be applied.
Question:
For each of the following independent situations, indicate whether or not the cost constraint should be applied. (Write “Yes” or “No” beside each situation.)
a. ______ The manager of a privately held company believes the company should be using IFRS and not ASPE even though using IFRS will not provide any additional relevant information to users.
b. ______ The CEO of a publicly traded company wants to include a detailed analysis of inventory purchases (not required by IFRS) in the financial statements because one shareholder has requested this information.
c. ______ The manager of a privately held company discovers a minor error in the financial statements issued three years ago. The manager believes he must reissue all the financial statements with the error corrected. There are no external users of the financial statements with the exception of the Canada Revenue Agency.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak