Conceptual Framework & Canadian Standards (IFRS/ASPE)

A profitable private enterprise is eligible for ASPE. Name a situation where it would rationally choose IFRS instead, and what the trigger has in common.

Two not-for-profit organizations need to pick a reporting framework — one is government-controlled, one is not. Which standards may each report under?

An asset's carrying amount exceeds its discounted future cash flows but is below its undiscounted future cash flows. Is it impaired under IFRS? Under ASPE?

A GAAP-following entity hits a transaction no standard addresses. What must guide the accounting policy it develops?

A specific standard's required treatment seems to conflict with a Conceptual Framework concept. Which one governs, and what is the Framework's actual role?

A defined-benefit plan produces a large actuarial loss. Where does it land under IFRS versus ASPE, and what does that do to reported net income?

When making a borderline estimate, why might the bias differ between an ASPE preparer and an IFRS preparer?

A private enterprise wants the IFRS revaluation option for PP&E but ASPE's simpler rules everywhere else. Is that allowed?

In preparing financial statements, what are the three main areas where professional judgment is applied?

What is the objective of general-purpose financial reporting, and who are its primary users?

An impaired asset's value recovers. Must (or may) the prior impairment loss be reversed under IFRS? Under ASPE?

How do IFRS and ASPE differ on revaluing property, plant, and equipment?

Match each entity to its CPA Canada Handbook part: a publicly traded company, a private company, a charity, and a pension plan.

A government owns both a regulatory department and a profit-seeking Crown corporation (a GBE). Do they report under the same standards?

An entity uses a resource it does not legally own. Under the Conceptual Framework's definition, can it still be the entity's asset?

A shareholder injects cash, raising equity. Under the Framework's definitions, is that income? And is a dividend an expense?

What does a complete set of general-purpose financial statements include under IAS 1?

Under the ASPE asset definition, what single test decides whether a cost gets capitalized or expensed immediately?

A Canadian company labels its statements 'balance sheet' and 'income statement' and lists shareholders' equity before liabilities. A reviewer says this breaches IAS 1. Is the reviewer right?

A prospective lender asks for a balance sheet with assets at fair value instead of historical cost. May the accountant prepare it, and can it be called a GAAP statement?

A proposed accounting standard is technically elegant and favoured by preparers, but users object to it. Why might it still fail to become GAAP?

The Conceptual Framework is said to have a 'primary emphasis on the balance sheet.' What does that emphasis actually mean for how income and expenses get determined?

In accounting, what is meant by 'professional judgment,' and why can't it simply be memorized from the Handbook?

Canada could have simply adopted IFRS word-for-word. Instead it 'harmonized.' What route did it actually take, and roughly on what timeline?

After 2011 most Canadian PAEs report under IFRS, yet a couple of entities are allowed to use U.S. GAAP instead. Which ones, and what's the catch on one of them?

Compared with the Canadian standards in force before the IFRS changeover, what changes in flavour when an entity moves to IFRS measurement?

What is the underlying conceptual justification for letting private enterprises use a simpler set of standards than public companies?

Private-company relief in Canada evolved through two stages before landing on today's ASPE. What were they?

Does a private enterprise have to be below some size, or get shareholder consent, before it can use ASPE? And must its preparers still consult the IFRS-based standards?

Two otherwise-identical companies report the same transactions, one under IFRS and one under ASPE. Where will the difference in note disclosures be most visible?

A company incurs development costs that meet the capitalization criteria. How does the required treatment differ between IFRS and ASPE?

A lessee signs an 18-month equipment lease that transfers only some of the risks and rewards of ownership. Would it put an asset and liability on the books under IFRS? Under ASPE?

Management sometimes distorts reported results. What typically motivates it, and how do the distortion methods range from mild to fraudulent?

When adjusting a company's statements to make its accounting policies comparable, in what order are the statements reworked, and which one usually stays put?

This text narrows the hundreds of possible ratios to four. What are they, which risk/return dimension does each cover, and what can you benchmark them against?

When assessing how a change in accounting method moves a ratio, why is it a mistake to look only at the numerator, and what balance should return ratios ideally use?

Under ASPE, when does an entity switch from historical-cost, going-concern statements to a liquidation basis, and what if survival is merely doubtful?

A company earns almost all its revenue from a single customer or contract. Does ASPE require anything about that in the statements?

A manufacturer ships product, but the contract says the customer must confirm the goods meet detailed specifications. Under ASPE, when is revenue recognized?

A lawsuit is pending against a company. Under ASPE, what determines whether it is accrued as a liability versus merely disclosed as a contingency?

How should the portion of long-term debt coming due within the next year be presented under ASPE, and what related disclosure is expected?

A company is capitalizing interest into a self-constructed asset. Under ASPE, is there a point at which it must stop, and what if it kept going?

Under IFRS 3, a parent can measure noncontrolling interest two ways. What are they, and what's a labelling subtlety in the standard?

Under ASPE, how does the impairment test differ between a definite-life asset (like equipment) and goodwill or an indefinite-life intangible?

Under IAS 1, does a complete set of financial statements include a standalone statement of retained earnings? Where does retained earnings actually get reconciled?

An intangible asset is assigned an 'indefinite' useful life. Does that mean it lasts forever?

Under ASPE, must a private company that has subsidiaries consolidate them the way IFRS requires?

How does the Handbook define a 'private enterprise,' and how is that definition essentially the mirror image of a publicly accountable enterprise?

A company receives a government grant tied to the cost of building a plant and to job creation, not to selling goods. Under ASPE, can it just book the grant as revenue?

Financial statements only report the past, yet users care about the future. What makes reporting 'high quality,' and where in the annual report do users look for management's forward view?

An entity is being sued and may lose. Under the Conceptual Framework's definition of a liability, what single feature decides whether a liability exists at all?

Under the Conceptual Framework, equity is a residual. What does that imply about how the reported equity figure is determined, and what happens to it when an asset is remeasured?

A credit union has no publicly traded shares or debt. Is it a publicly accountable enterprise (PAE), and why does that matter?

The Conceptual Framework was overhauled and reissued. Roughly when, and what broad ground do its chapters now cover?

IFRS 13 gave 'fair value' a single definition. How is it defined, and how is it measured differently for a non-financial asset?

An IFRS reporter classifies certain equity investments as fair value through OCI. A colleague wants the same FVTOCI treatment under ASPE. Why can't that work?

A parent owns less than 100% of a subsidiary yet must consolidate it fully. What is the real trigger for consolidation, and how does it echo the Conceptual Framework?

Under IFRS 10, when is a parent excused from preparing consolidated statements, and if it then issues only separate statements under IAS 27, how may it measure its subsidiaries?

What is push-down accounting, and why is it available under ASPE but not under IFRS — and only above a certain ownership level?

In accounting, what does it mean to 'derecognize' an asset or liability?

A company issues convertible bonds. How do IFRS and ASPE treat the conversion (equity) option component?

What actually gives the CPA Canada Handbook its authority in Canada, rather than it being merely a professional best-practice guide?

In financial-statement analysis, what's the difference between the vertical and horizontal forms of common-size analysis?