Snowboarding company has a $5 000 000 note payable outstanding. the terms of the note require repayment of principle on June 30 20X2. the company is now finalizing financial statements for year ending, December 31 20X1. On January 25, 20X2, before the financial statements are released, the company reaches an agreement with e lender to refinance the liability with a new date June 30, 20X5.

snowboarding company also has committed to donate $200 000. No donation agreement has yet been signed, but a public announcement has been made and the company and snowboarding association have met and agreed to the races the funding will support for the reason ad promotion of the snowboarding company through its website.

QUESTIONS

1) if snowboarding company complies with IFRS will the note payable be classified as a current or long-term liability on December 31, 20X1?

2) if snowboarding company complies with ASPE will the note payable be classified as a current or long-term liability on December 31, 20X1?

3) how would you answer 2) if the note payable was due on February 20 20X2 and common shares are worth $5 000 000 were issued for cash February 28, 20X2 to replenish funds used to repay the note assuming financial statements were issues march 31, 20X2?

4) if snowboarding company complies with IFRS, will the $ 200 000 amount be recorded as a liability?explain your answer.

Answer rating: 100% (QA)

This question relates to the scenarios of Adjusting NonAdjusting Events and their Accounting Treatment as per IFRS and ASPE 1 if Snowboarding company ... View the full answer