Lusail Company is constructing administrative buildings. These buildings are constructed according to contracts with reputable and reputable clients. During 2016, Lusail Company started the construction of an administrative building for Al Khor Company. The contract price was $20 million. The costs that have been incurred, costs expected to be completed at the end of each year, invoices issued, and cash receipts during the period of this contract were as follows:

		costs incurred during the year	Expected costs to complete at the end of each year	Invoices during the year	cash receipts during the year
2016		$200,000	$6,000,000	$1,000,000	$900,000
2017		2,000,000	6,000,000	1,000,000	900,000
2018		4,750,000	1,250,000	5,000,000	4,300,000
2019		4,750,000	1,500,000	5,000,000	4,300,000
2020		2,250,000	656,250	4,000,000	4,800,000
2120		2,250,000	0	4,000,000	4,800,000

In order to implement the above-mentioned construction contract to the fullest extent, Lusail Company leased a machine from Qatar Leasing Company in June 30, 2018. The lease agreement stipulates that Lusail Company will pay a semi-annual rent amount of $562,907 within the lease term is 3 years, on each day of June 30 and December 31 of each year, bearing in mind that the first payment of the rent amount The semi-annual maturity starts from June 30, 2018. The borrowing rate of Lusail Company is 10%, which is the same rate used by Qatar Leasing Company when calculating the rent amounts owed to it. Depreciation is recorded using the straight-line method at the end of December every year. The fair value of the machine is $3 million

In addition to the above, on January 1, 2019, Lusail Company issued bonds worth $1,500,000 for a period of 5 years at an interest rate of 4%. The interest is payable on a semi-annual basis on June 30 and December 31 of each year. This is given that the rate

The market capitalization of similar bonds is 6%. Lusail Company understands that in accordance with generally accepted accounting principles in the United States companies can move from the effective interest method to the fair value method of accounting for their obligations with a simplified justification to do that. On December 31, 2020, the market interest rate increased to 8%, which prompted Lusail to switch to the value method fair accounting for its bonds. On the same date, the company estimated the fair value of its bonds at $1,342,735. Although IFRSs allow the use of fair value to account for liabilities, but there are several limitations and requirements to apply it. Unfortunately, the Lusail Company did not meet these requirements, which forced the company to follow the method effective interest when reporting its bonds in the financial statements rather than the fair value method.

Required:

1. Briefly explain the main differences between US generally accepted accounting principles and standards International Financial Reporting with a focus on the following accounting treatments:

• Recognition of revenue before delivery, on delivery, after delivery
• Report on lease contracts
• Reporting obligations at fair value

2. Explain and discuss how previous financial transactions will affect the income list AndStatement of financial position For Lusail Company in December 31, 2016 and December 31, 2020 Assuming the company follows the US GAAPAnd use the percentage method to be completed with regard to contracts for the construction of administrative buildings and the fair value method for reporting its bonds in 2020.
3. Explain and discuss how previous financial transactions will affect the income list and Statement of financial position For Lusail Company in December 31, 2016 and December 31, 2020 Assuming the company follows the IFRS and use it as a cost recovery method with regard to contracts for the construction of administrative buildings and the effective interest method for reporting its bonds in the year 2020.

4. Compare your answers to those wanted 2 and 3, and write a brief note explaining any financial statements (those prepared in accordance with IFRS or the It will provide a better position for operating income (or operating loss) for the company (US GAAP.).