At December 31, 2014, Parew Corporation has a long-term debt of $600,000 owing to its bank. The

Question:

At December 31, 2014, Parew has a long-term debt of $600,000 owing to its bank. The existing debt agreement imposes several covenants related to Parew's liquidity and solvency. At December 31, 2014, Parew was not in compliance with the covenants related to its current ratio and debt to total assets ratio; however, the bank was allowing Parew to operate outside of its covenants. Parew prepares in accordance with IFRS.
(a) Should the debt be reported as a current liability at December 31, 2014?
(b) How would your answer to part (a) be different if Parew prepared in accordance with ASPE?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...