i need the answer quickly a) Calendar has a reporting date of 31 December 20X7. It prepares its financial statements inaccordance with International Financial Reporting Standards. Calendar develops biotech products forpharmaceutical companies. These pharmaceutical companies then manufacture and sell the products.Calendar receives stage payments during product development and a share of royalties when the finalproduct is sold to consumers. A new accountant has recently joined Calendar's finance departmentand has raised a number of queries.The new accountant has been reviewing Calendar's financial reporting processes. She hasrecommended the following:• All purchases of property, plant and equipment below $500 should be written off to profit or loss.The accountant believes that this will significantly reduce the time and cost involved inmaintaining detailed financial records and producing the annuai financial statements.• A checklist should be used when finalising the annual financial statements to ensure that alldisclosure notes required by specific IFRS and LAS Standards are included.Required: With reference to the concept of materiality, discuss the acceptability of the above twoproposals. Note: Your answer should refer to the IFRS Practice Statement 2 Making materialityjudgementsSolve only (c)b) The finance director of Victor is aware that the IASB has issued an exposure draft relating todisclasure of accounting policies (Proposed amendments to IAS 1 and IFRS Practice Statement 2). Shehas yet to study that exposure draft but has enquired whether how this ED would impact alt hisdisclosure of material accounting policies, and certain immaterial disclosures in his current financialstatements.Required: Explain the proposals in ED 2019/6 Disclosure of Accounting Policies (Proposedamendments to LAS 1 and IFRS Practice Statement 2) and respond to the director's questionregarding Victor's disclosure of material accounting policies, highlighting the proposed amendmentson IAS 1 and proposed guidance on the usage of PS 2 Making Materiality Judgementse) Another company, Wader has decided to close one of its averseas branches. A board meeting washeld on 28 February 20x8 when a detailed formal plan was presented to the board. The plan wasformalised and accepted at that meeting. Letters were sent out to customers, suppliers and workerson 15 March 20X8 and meetings were held prior to the year end to determine the issues involved inthe closure. The plan is to be implemented in April 20XB. The company wants to make a restructuringprovision of $B million for the closure, but is unsure whether this is permissible.Wader identified a contract with a supplier as potentially onerous. The company sought legal advice,which confirmed that the contract is onerous. Under the contract, Wader must purchase a minimumof $1.5 million of goods each year for the two years ending 31 March 20x9 and 20Y0. The relevantdiscount rate for these payments is 5%. When contacted by Wader, the supplier offered to cancel thecontract for a one-off payment of $2.4 million on 31 March 20X8.Explain how the closure of the overseas branch and the onerous contract should be treated inaccordance with IFRS Standards.Solve only (c)

An onerous contact is a term used in accounting to denote a contract that is costlier than its…

Answered: Explain how the closure of the overseas…

Explain how the closure of the overseas branch and the onerous contract should be treated in accordance with IFRS Standards. Solve only (c)

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 13QE

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