Computer Equipment.

In $2020,$ Creative had purchased its computer equipment in Gander $($Newfoundland and Labrador$).$ Related transportation cost amounted to $$12,000.$ Insurance while in transit was $$20,000.$ The company also had to pay technical engineers to install and setup the equipment, costing $$13,000.$ Start$-$up and testing costs were $$5,000.$ Total expenditure $$50,000$ was fully expensed in $2020.$

In January $2023,$ the company traded one of its IBM server $($Model $19)$ with a newer HP server $($Model $23).$ Below are the details of the exchange. Based on the technical specifications, the new HP server will result in improved level of efficiency for the development team at Creative. At the same of exchange, Creative considered the transaction without commercial substance.

P$8-48$

Historical cost of IBM server $20$ $$195,000$

Accumulated depreciation of IBM server $20$ $$35,000$

Fair market value of IBM server $20$ $$170,000$

Fair market value of HP server $23$ $$185,000$

Cash paid $$15,000$

For the year ended Dec $31,2023$ the company controller gathered the following information on the computer equipment. Despite evidence from internal reporting shows performance below expectations, no impairment was recognized. The company has not conducted any revaluation or impairment since inception.

Original cost $$650\mathrm{.}000$

Accumulated depreciation $$260,000$

Fair value $$370,000$

Costs to sell $$10,000$

Incremental cash flow $2020$ $$90,000$

Incremental cash flow $2021$ $$80,000$

Incremental cash flow $2022$ $$70,000$

Incremental cash flow $2023$ $$60,000$

Incremental cash flow $2024$ to $2029$ $$20,000$ Cost of capital $2\%$

PROJECT REQUIREMENTS

A$.$ Project Summary $(5\%)$ Your group represents the consultants$/$auditors for Avenir Co$.$ Based on the information presented in the scenario, list the key issues. Note: The summary should be no more than HALF a page.

B$.$ Project Report $(95\%)$ Following the summary of issues, you have identified in part A of this project, provide a comprehensive report outlining: $$ THREE accounting policies have been violated for each transaction identified as problematic? $$ Prepare the required calculations and journal entries that would convert the problematic transactions identifies in part A$,$ from ASPE to IFRS compliance. $$ What adjustments you would recommend to Creative, to ensure that the financial statement at year$-$end $2023$ reflect a reliable, accurate information?