Hastings Inc. (HI) is a manufacturer that produces stainless steel car parts. It began as a fan1ily business several years ago and all shares are owned by the Hastings family. The company's main assets are its manufacturing facility and surrounding land. The property was purchased many years ago and the carrying value reflects only a fraction of the asset's cost.
The company currently follows ASPE and is wondering what the impact would be of switching to IFRS. Several of the Hastings family members would like to take the company public in the next five to 10 years.
Because of the recent dip in the economy, the company has suffered losses over the past three years. However, as the economy has recently begun picking up, management is confident that this year will be a profitable one.
Instructions
Adopt the role of the company's auditors and discuss any financial reporting issues. Use the conceptual framework noted in Chapter 2 for the analysis.