PLEASE SHOW ALL WORK, THANKS.

BACKGROUND

PROJECT

NGD Corp, a publically traded company, is a manufacturer of electrical supplies. Its main

headquarters is based in Salt Lake City, Utah, and the company has been operating since 1977. The

company sells its products to the retail market on a world-wide basis. Its major clientele is Home Depot

and Lowes and has captured about 10 percent of the world market of light bulbs sales. Their financial

statements presented below, for the Year Ending December 31, 2019, have been prepared using US

GAAP. The controller would like to begin to see the effects of using IFRS on the Income Statement and

Balance Sheet and you has been assigned to help with this task. The company would like to adapt IFRS

by as early as next year as it is considering a new stock issue in the London Stock Exchange, which

requires IFRS compliance.

FINANCIAL STATEMENTS

Balance Sheet (in 000's)

As of 12/31/2019

ASSETS LIABILITIES AND SHAREHOLDERS EQUITY

Current Assets Current Liabilities

Cash 66,000 Accounts payable 40,000

Accounts Receivable 50,000 Accrued Expense 30,000

Investments 20,000 Taxes payable 10,000

Inventory (LIFO) 100,000 Total Current Liabilities 80,000

Total Current Assets 236,000

Property, Plant and Equipment Noncurrent Liabilities

Assets (cost) 200,000 Bonds payable 100,000

Less: Total Liabilities 180,000

Accumulated Depreciation (60,000)

140,000 Shareholders' Equity

Intangible Assets Common Stock ($1 par) 100,000

Trademark 10,000 Retained Earnings 120,000

Goodwill 14,000

24,000 220,000

Total Assets 400,000 Total Liabilities and 400,000

Shareholders' Equity

INCOME STATEMENT

1/1/2019-12/31/2019

(In 000's)

INCOME FROM CONTINUING OPERATIONS

Sales 500,000

Cost of Goods Sold 350,000

Gross profit 150,000

Selling and Administrative Expenses 62,000

(exclusive of Amortization and Depreciation)

Earnings before Interest, Taxes, Depreciation and Amortization 88,000

Amortization and Depreciation Expense 20,000

Earnings from Operations 68,000

Other Expenses and Losses

Loss from Hurricane 30,000

Earnings before Interest and Taxes 38,000

Interest Expense 8,000

Income before Tax 30,000

Tax Expense (30 %) 9,000

Earnings from Continuing Operations 21,000

Net Income 21,000

ADDITIONAL INFORMATION

1. NGD Corp. uses the LIFO method to account for its inventory. The LIFO reserve was $30,000 at

the beginning of the year and $40,000 as of year-end.

2. Management has established that the Fair market value of Property, Plant and Equipment as of

1/1/2019 is $170,000, resulting in a $10,000 increase above Book Value.

3. Upon review, management has established the following Fair Market Values for the presented assets

as of 12/31/2019:

Goodwill $20,000

Trademark $20,000

4. In 2018, there was a Goodwill impairment accounted for in the amount of $6,000.

5. In 2016, there was a Trademark impairment of $4,000.

6. Property, plant and equipment is depreciated over a 10-year period using the straight line

depreciated method. There is no salvage value. Amortizable Intangible assets are amortized over a 5 year period using the straight line method. No salvage value is expected.

7. Investments include Available for Sale Securities (AFS) with a Fair market Value of $20,000 as

of 12/31/2019. The beginning of year value was $14,000 and $4,000 of this increase of value is

due to an exchange rate gain.

8. There are contingencies of $12,000 stemming from civil lawsuits. Legal council considers the payout

slightly "more likely than not", but not highly probable.

9. The company incurred a loss due to hurricane damage which is considered unusual and infrequent.

10. The effective tax rate for NGD is 30 percent.

REQUIRED

For each scenario above (1 to 10):

1. Identify the similarities and differences between the Income Statement effects of US GAAP and IFRS.

2. Identify the similarities and differences between the Balance Sheet effects of US GAAP and IFRS.

3. Record the differences above, in journal entry form, to satisfy IFRS rules.

4. Develop an Excel worksheet with US GAAP, Adjustments, and IFRS columns for the Income Statement

and the Balance Sheet.

5. Prepare an IFRS Income Statement for the 2019 calendar year.

6. Prepare an IFRS Balance Sheet as of December 31, 2019.

7. Prepare for the Controller a report (Word or PDF document) with discussion of the accounting

differences, restated financial Statements, and a summary of your findings.