ASN Corporation is in the process of preparing its financial statements for the current fiscal year end For each of the following independent situations, indicate (yes or no) whether ASN should recognize a contingency for the situation under ASPE Next, assume that ASN follows proposed IFRS for the same situations, and indicate (yes or no) whether ASN should recognize a liability for each situation Independent Situation ASPE IFRS a) ASN Corporation operates an oil refinery in Oklahoma, an area prone to strong tornados The current net book value shown on ASNs books for the refinery and the associated land is $6,500,000 Yes No Yes No b) ASN Corporation uses DAW Installations to install some of its products On one project, DAW did a poor job and damaged the customers facility ASN has filed a lawsuit against DAW for damages in the amount of $40,000 DAW is contesting the suit and the case has yet to determine the merits of the claim Yes No Yes No c) One of ASNs customers has telephoned to complain about one of ASNs products The customer is angry about some alleged manufacturing defects and has threatened to sue ASN for $100,000 So far, no lawsuit has actually been filed Yes No Yes No d) During the year, another company (LTN, Inc ) asked ASN to act as a guarantor so that LTN could obtain a $5,000,000, 5 year loan from the bank, in exchange for a fee If LTN defaults on the loan in any way, ASN would be required to repay the bank on LTNs behalf To date, LTN has made all required payments on the loan and the probability of having to make a payment to the bank relating to the guarantee is remote Yes No Yes No e) CTZ Ltd , a competitor of ASNs, has filed a lawsuit against ASN for $500,000 ASNs attorneys have reviewed the lawsuit and believe that, although CTZ has a valid case, the suit can be settled out of court for $350,000 Yes No Yes No

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ASN Corporation is in the process of preparing its financial statements for the current fiscal year end. For each of the following independent situations, indicate

ASN Corporation is in the process of preparing its financial statements for the current fiscal year end.

For each of the following independent situations, indicate (yes or no) whether ASN should recognize a contingency for the situation under ASPE. Next, assume that ASN follows proposed IFRS for the same situations, and indicate (yes or no) whether ASN should recognize a liability for each situation.

	Independent Situation	ASPE	IFRS
a)	ASN Corporation operates an oil refinery in Oklahoma, an area prone to strong tornados. The current net book value shown on ASN’s books for the refinery and the associated land is $6,500,000.	Yes/No	Yes/No
b)	ASN Corporation uses DAW Installations to install some of its products. On one project, DAW did a poor job and damaged the customer’s facility. ASN has filed a lawsuit against DAW for damages in the amount of $40,000. DAW is contesting the suit and the case has yet to determine the merits of the claim.	Yes/No	Yes/No
c)	One of ASN’s customers has telephoned to complain about one of ASN’s products. The customer is angry about some alleged manufacturing defects and has threatened to sue ASN for $100,000. So far, no lawsuit has actually been filed.	Yes/No	Yes/No
d)	During the year, another company (LTN, Inc.) asked ASN to act as a guarantor so that LTN could obtain a $5,000,000, 5-year loan from the bank, in exchange for a fee. If LTN defaults on the loan in any way, ASN would be required to repay the bank on LTN’s behalf. To date, LTN has made all required payments on the loan and the probability of having to make a payment to the bank relating to the guarantee is remote.	Yes/No	Yes/No
e)	CTZ Ltd., a competitor of ASN’s, has filed a lawsuit against ASN for $500,000. ASN’s attorneys have reviewed the lawsuit and believe that, although CTZ has a valid case, the suit can be settled out of court for $350,000.	Yes/No	Yes/No

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The detailed answer for the above question is provided below Here are the responses for each situation under ASPE and IFRS Situation ASPE IFRS a ASN C... blur-text-image