Please answer all

1. Under which of the following circumstances would Restart Inc. (Restart), a company subject to IFRS, be exempt from the requirement to restate prior periods, on the grounds of impracticability?

a) Restart has been incorrectly calculating ending inventory balances for 10 years because it did not include shipping costs. The company only has access to shipping records for the past six years.

b)Restart has determined that, due to an improved quality assurance process, its warranty provision should be reduced to 2% of sales from 5% of sales.

c)Restart discovered that several of its buildings have been amortized incorrectly for the past five years. While it has the records to calculate the error, its accounting department is understaffed and Restart would have to authorize some minor staff overtime to calculate the adjustment necessary.

d) Restart has a policy to depreciate its manufacturing equipment over 10 years; however, it was discovered that the equipment has actually been depreciated over eight years. The CFO has determined that the difference in depreciation is immaterial.

2. Ranger Inc., an entity subject to ASPE, has several accounting changes to adjust for in the current year. Which of the following would be considered a change in estimate?

a) In order to improve the relevance of its financial statements, Ranger had decided to account for income taxes under the future income taxes method, instead of the taxes payable method.

b) Ranger has determined that its factories are deteriorating faster than originally anticipated, so it will now depreciate the factories over 20 years instead of 25 years.

c) Ranger has determined that average cost is a better inventory valuation method for its current product line and has begun accounting for inventory this year using this method. Previously, inventory was accounted for using FIFO.

d) Ranger discovered that the full sale price for a sales arrangement involving a good and a three-year service contract was recognized as revenue, when the service portion should have been deferred.

3. Wonderful Windows Inc. (Wonderful Windows) manufactures wood frame windows and frames and is preparing financial statements for the current year end. Assuming Wonderful Windows reports under IFRS, which of the following circumstances requires prospective treatment?

a) Wonderful Windows amortizes its delivery trucks over eight years, but it has been discovered that all trucks purchased last year have been amortized over five years.

b) Wonderful Windows purchased some new cutting equipment last year and determined it should be amortized over six years. However, technology changes in the current year have resulted in management assessing that this equipment will now need to be replaced in two years.

c) During the year, Wonderful Windows expensed an allocation of direct labour costs which should have been added to ending inventory. This resulted in an overstatement of COGS last year.

d) Wonderful Windows has decided to change its inventory costing method from WA to FIFO, to be more comparable to its closest competitors.

4. Which of the following is a difference between IFRS and ASPE regarding accounting for changes in accounting policies?

a)There are no differences between IFRS and ASPE in accounting for changes in accounting policies.

b) ASPE only allows for changes in accounting policy when the change provides reliable or more relevant information.

c) ASPE does not require disclosures about the expected effect on the entities financial results of standards that have been issued but are not yet effective.

d) ASPE requires an opening balance sheet for one additional earlier comparative period, when retrospective treatment is required.

5.Which of the following statements regarding accounting for prior-period errors is correct under IFRS?

a) Prior-period errors must be accounted for prospectively.

b) All periods that are impacted by the error must be disclosed in the corrected financial statements.

c) Impracticability does not apply to retrospective treatment for prior-period accounting errors.

d) The restated financial statements should reflect the results that would have been presented had the error not occurred.