Imax Corporation is a Canadian company whose shares trade on the TSX and NASDAQ. The company files

Question:

Imax is a Canadian company whose shares trade on the TSX and NASDAQ. The company files its statements in U.S. (as allowed by the Ontario Securities Commission). The company is one of the world’s leading entertainment technology companies, specializing in large-format and three-dimensional film presentations. It designs, manufactures, sells, and leases projection systems. Most IMAX theatres are operated by third parties under lease and licensing agreements. The company also produces films.
The following excerpts from the December 31, 2008 explain various transactions that have been entered into:
The Company enters into theater system arrangements with customers that contain customer payment obligations prior to the scheduled installation of the theater system. During the period of time between signing and the installation of the theater system, which may extend several years, certain customers may be unable to, or elect not to, proceed with the theater system installation for a number of reasons including business considerations, or the inability to obtain certain consents, approvals or financing. Once the determination is made that the customer will not proceed with installation, the arrangement may be terminated under the default provisions of the arrangement or by mutual agreement between the Company and the customer (a “consensual buyout”). Terminations by default are situations when a customer does not meet the payment obligations under an arrangement and the Company retains the amounts paid by the customer. Under a consensual buyout, the Company and the customer agree, in writing, to a settlement and to release each other of any further obligations under the arrangement or an arbitrated settlement is reached. Any initial payments retained or additional payment received by the Company are recognized as revenue when the settlement arrangements are executed and the cash is received, respectively. These termination and consensual buyout amounts are recognized in Other revenues. The company has various financing agreements that contain restrictive covenants, including restrictions on debt levels.
Instructions
Adopt the role of a potential investor and analyze the financial reporting issues. Use IFRS for the analysis (as opposed to U.S. ).
Financial Statements
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