Marine Atlantic Inc. (MA) is a federal Crown corporation that reports to Parliament through the Minister of Transport. MA is a separate legal entity with delegated financial and operational authority to provide a constitution ally mandated passenger and commercial marine transportation system between the Island of Newfoundland and the Province of Nova Scotia. According to its 2010-2011 annual report, MA earned $95,763,000 in operating and other revenues. Operating expenses and amortization totaled $222,454,000. MA receives annual parliamentary appropriations for operations from the Government of Canada to the extent the cost of providing ferry services is not recovered from commercial revenues.
Required
(a) For purposes of preparing its own financial statements, consider what type of government organization MA is.
Explain alternative classifications that might apply. Indicate what classification(s) you recommend and the reasons.
(b) Explain how MA should be accounted for in the Government of Canada's financial statements.
(c) Based on your analysis from (a), indicate possible financial reporting frameworks available to MA to apply when preparing its own financial statements. Recommend a specific reporting framework and state reasons in support of your recommendation.