16-6

Question 1

ASPE vs IFRS for hybrid instruments

Answer 1

1. IFRS:
   - calculate the PV so you can record the equity for the difference between PV and face value
   - ex for a dsounted N/P:
   dr. Cash
   cr. Notes Payable
   cr. Contributed Surplus - Conversion Rights
2. ASPE:
   - you don’t need to separate the liability and the equity
   - dr. Cash
   cr. Note Payable

Question 2

Accounting for interest expense IFRS vs ASPE

Answer 2

The diference is that for IFRS you need to account for the difference between PMT and Interest Expense by increasing the Note Payable. (in this case, for ASPE we didn’t have a disocunt/premium)

The Contrinuted Surplus - Conversion Rights account stays separate and I need to bring my Note Payable account to the maturity value.

Question 3

CSOP - IFRS vs ASPE

(compensatory stock option plan)

Answer 3

Same entry for both:

dr. Compensation Expense
cr. Contributed Surplus - Stock Options

Question 4

Forward contract - ASPE vs IFRS

(the compaoy
decided to purchase its U.S. currency needs for 2015 in advance)

Answer 4

Same entry when you record a gain/loss from a change in the currency rate:

dr. Derivates- Finacial Assets/Liabilities
cr. Gain

Question 5

Determine the carrying amount of each statement of financial position item at year end, December 31, 2014,
under both ASPE and IFRS

Answer 5

Don’t forget:

• to recalculate Note Payable (+/- premium/discount)
• take into account the changes in the Contributed Surplus account (after exercising options/warrants)