SaulGroup, Inc., a U.S.-based corporation, currently uses U.S. GAAP to prepare its consolidated financial statements. SaulGroup is considering switching to IFRS and asking for your help in assessing the impact this change will have on its financial statements. SaulGroups accounting principles differ from IFRS in the following areas restructuring, pension plan, stock options, revenue recognition, and bonds payable. Instructions: Please respond to the following questions in each scenario:

1. Restructuring Provision On December 1, 2017 the management of SaulGroup, Inc. announced its plan to close a technical support division in California and move it to Vietnam. All the jobs in this division will be eliminated by the end of 2018. To compensate the employees who would stay with the company until the last day of their position, the company offered a termination bonus of $15,000 to each employee. SaulGroup estimates it will pay the termination bonuses at the end of 2018 for a total of $450,000. The present value of the estimate termination bonus is $400,000. a. How is the restructuring treated under (1) U.S. GAAP and (2) IFRS in 2017? b. Prepare the necessary journal entries.

2. Pension Plan In 2017, SaulGroup, Inc. made amendments to its pension plan. As a result, the company incurred $300,000 past service costs. Under the pension plan, there are 200 active employees with an average expected remaining working life of 10 years and no retirees. a. How is the amount of past service costs treated in 2017 and subsequent years under (1) U.S. GAAP and (2) IFRS? b. Prepare the necessary journal entries.

3. Stock Options On January 1, 2017, SaulGroup, Inc. granted 2,000 stock options to its senior employees. The options vest in equal installments over three years with 1/3 vest in 2017, 1/3 in 2018, and 1/3 in 2019. The company is experiencing the cost of the options on a straight-line basis over the three-year period at $20,000 per year (2,000 options x $30 / 3 = $20,000) a. How is the amount of compensation expense treated in 2017 and subsequent years under (1) U.S. GAAP and (2) IFRS? b. Prepare the necessary journal entries.

4. Revenue Recognition In 2017, SaulGroup, Inc. signed a fixed-fee contract to provide network security services which requires on premise server to Goodman LLC. for $120,000 in one year. The company has performed similar services in he past and estimated with a high degree of reliability that he project is 40% complete at the end of 2017. a. How is the revenue on this service contract recognized in year 2017 under (1) U.S. GAAP and (2) IFRS 15? b. Prepare the necessary journal entries.

5. Bonds Payable On January 2018, SaulGroup Inc. issued $5,000,000 of 4% bonds at par value. The bonds will mature in five years on December 31, 2022. The costs of issuing the bonds were $300,000. Interest is paid on the bonds annually. a. How will the expense be recognized in 2018 and 2019 under (1) U.S. GAAP and (2) IFRS? b. Prepare the necessary journal entries.