Investment

During 2019, Wellness purchased 6,000 Telus shares for $31 per share (total $186,000). Wellness designated 50% of Telus shares as FVPL while irrevocably elected to record the remaining 50% as fair value changes through OCI.

Wellness held these shares until October 2021, when it sold them for $36 per share. During these three years, Telus paid dividends of $1 per share on November 31. On Wellness' fiscal year end at December 31, Telus shares closed at $34, $29 and $38 in 2019, 2020 and 2021 respectively. However, Wellness has always recorded its share price at $31 at every fiscal year.

At year end December 31, 2021, Wellness has decided to put the business up for sale in order to capitalize on the tech boom in the medical healthcare industry. GenX Corporation is a prospective buyer. Before proceeding with a full review and due diligence on Wellness, GenX has hired your auditing company to conduct some initial reviews on Wellness' financial transactions. GenX's accounting policies are based on IFRS framework.

List key issues based on these questions?

What accounting policies have been violated for each of the above transaction?

What implications they have on the financial statements?

What problems do you see arising based on GenX's perspective as the potential buyer?

What should have been the correct journal entries and calculations for these transactions in order to comply with IFRS and ASPE?

What adjustments should be made now in order to reflect a reliable, accurate financial statement for year-end 2021?