In this activity, you will determine which accounting policy choices each user would want to adopt. The accounting policy choices are:

1.Under IFRS, elected, under IAS 16.31, to use the revaluation model for significant classes of property, plant, and equipment.

2.Under ASPE. elected, under Section 1591.24, to report all subsidiaries using the cost basis.

3.Under ASPE. elected, under Section 3064.40, to expense all development costs.

4.Determined that revenue should be recognized using the percentage of completion basis for services performed.

5.Elected to report all of the financial assets at fair market value, with gains and losses reported on the income statement.

Document your response in the table below (the first cell is completed as an example):

Users:

Referencing each accounting policy choice above, briefly discuss whether the policy choice meets the needs of the user:

(1)

(2)

(3)

(4)

(5)

A - I am a user of the financial statements. I am a small business owner with a business loan. I provide monthly GAAP statements to my banker using well-known accounting software. I try to minimize my costs whenever possible.

This would not meet the needs of the user because as a small business owner, they would not want to follow IFRS. In addition, they wouldn't want the complexity and cost of the revaluation model.

B - I am a user of the financial statements. I am a CEO of a public company. I am evaluated based on the financial operations of the company.

C - I am a user of the financial statements. I am part owner of a private manufacturing company. We need significant bank financing in the near future to expand operations.

D - I am a user of the financial statements. I am a bank manager looking to assess whether a company will be able to repay a loan as well as assess potential security for the loan.

E - I am a user of the financial statements. I am a venture capitalist who works closely with private companies that have the potential for growth, helping them grow until they hopefully become public within five years.