this is a case analysis so needed answer with these questions, its one question need detail explanation, read the case above and avoid plagiarism

Who are the main users of the case? Consider any key internal and external users of the financial information. What are the user objectives? What do the users really care about? For example a bank is a typical user and they care most about receiving the scheduled interest payments. What is your role in the case? This should be reasonably clear in the case but may be overlooked if not. What GAAP is appropriate in the case? Determine whether ASPE or IFRS is used or perhaps both need to be applied to the case. Is there a Big Picture item in the case? For example there may be a debt covenant imposed by the bank for financing. This covenant will likely be based on maintaining a certain financial ratio, such as current ratio or debt-to-equity ratio. As you identify issues in the case and recommend adjustments, this ratio will also require adjustment that could either better or worsen the ratio. Other common big picture items could be fraud, business acquisition/valuation, bonus payments, etc.

Vision Security Enterprises (VSE) is a home and commercial security company. The company was established in 1968 by Luigi Bruce, its sole shareholder, to provide security services in Halifax. Since its inception, VSE has grown to provide its services across all major cities in Atlantic Canada. In order to continue growing the company, Luigi has decided to expand into Ontario and Quebec. In order to facilitate the expansion, VSE is planning to become a franchiser whereby local entrepreneurs can purchase an exclusive right to be the Vision Security provider in their community. This is a significant change in strategy as VSE currently owns and operates all of the locations in Atlantic Canada. In order to help facilitate the strategic shift, Luigi hired Jason Armand early in the fiscal year as the new manager of the Ontario and Quebec region. Jason is familiar with the franchisee-franchisor relationship as he was formerly employed at a large pizza restaurant chain. and operated by VSE. Luigi will have no problem signing Jason's bonus cheque, which is calculated as 10% of the operating income generated from the Ontario and Quebec markets. You are the controller of VSE and recently began preparing for the December 31, 2020, year-end audit. The year-end audit will require more work this year because of the company's expansion, specifically the new franchisor transactions. As you prepare for the audit, you review the preliminary income statement, as prepared by for Ontario and Quebec segments (Exhibit I), along with information regarding various transactions that occurred during the year (Exhibit II). VSE prepares its financial statements in accordance with ASPE. Cohbit? Additional Information Regarding the Ontario and Quebec Operations - Before the franchise agreement is signed, there is a period of discussion whereby the general feasibility of the new location is assessed. Market research is conducted and the prospective franchisee's financial strength is examined. VSE incurs all of the costs during this stage. During the year, VSE, franchised seven locations in Ontario and eight locations in Quebec. The franchise agreements were signed during the following months: - As is standard in the franchisee industry, VSE developed a policy to charge an initial franchise fee and a continuing franchise fee. The initial fee of \$225,000 is paid through the following, nonrefundable payments: - The franchisee must pay a down payment of $25,000 when the franchise agreement is signed. Once signed, VSE will provide significant assistance to help the franchisee commence operations (e.g., help select an appropriate location, train employees, develop policies and procedures, provide legal and management assistance); however, the franchise is responsible to pay for all of the direct costs of establishing the new location. - A second payment of $50,000 is due once the franchisee commences operations. It takes approximately four to five months from signing the franchise agreement to commencing operations. VSE's involvement with the franchisee largely ends when the new location commences operations. Five of the seven locations Ontario are open and six of the eight locations in Quebec are open. - The final payment of $150,000 is due within one year of operations commencing. VSE does not have any experience to assess the likelihood of a franchisee surviving its first year. - Each franchisee is required to pay $2,500 per month in a continuing franchise fee for VSE. The continuing franchise fee covers various shared costs, such as regional advertising, software and hardware upgrades, and ad hoc support. - Jason encouraged initial growth by providing a promotional agreement with the first three franchisers. These franchisers were charged an initial franchise fee of $225,000, due upon opening, with no continuing fee for the first three years. All three franchises are open and paid their initial fee. These franchises have been opened for a combined 10 months during the fiscal year. - The following are number of months the franchisees were required to pay monthly franchise fees: No continuing franchise fees were collected from the franchises that signed an agreement in April and May. - During the year, VSE opened and operates two stores in Ontario (Toronto and Ottawa), and one store in Quebec (Montreal). The locations were opened late in the fiscal year but were still able to generate sales during November and December. The Ontario locations sold 30 security systems, while the Quebec locations sold 25 security systems. The security systems during the year were sold for the promotional price of $5,500, which includes the hardware, installation, and a two-year monitoring hardware alone is $6,000, with an additional $500 for installation. Customers can opt out of the two-year monitoring contract, which will reduce the price by $750. In addition, customers who already have the hardware can purchase the monitoring services for $1,250. All systems have been instaled as of the year end. - Jason undertook a large marketing campaign in November and December 2020 with the intention of attracting new franchises and increasing awareness of VSE's service offering. The advertising blitz is going to run into January 2021. Jason believes that the benefits of the marketing program will be realized in the next Accordingly, he capitalized $250,000 in marketing costs as at year end in order to match the costs to sales in future periods. Vision Security Enterprises (VSE) is a home and commercial security company. The company was established in 1968 by Luigi Bruce, its sole shareholder, to provide security services in Halifax. Since its inception, VSE has grown to provide its services across all major cities in Atlantic Canada. In order to continue growing the company, Luigi has decided to expand into Ontario and Quebec. In order to facilitate the expansion, VSE is planning to become a franchiser whereby local entrepreneurs can purchase an exclusive right to be the Vision Security provider in their community. This is a significant change in strategy as VSE currently owns and operates all of the locations in Atlantic Canada. In order to help facilitate the strategic shift, Luigi hired Jason Armand early in the fiscal year as the new manager of the Ontario and Quebec region. Jason is familiar with the franchisee-franchisor relationship as he was formerly employed at a large pizza restaurant chain. and operated by VSE. Luigi will have no problem signing Jason's bonus cheque, which is calculated as 10% of the operating income generated from the Ontario and Quebec markets. You are the controller of VSE and recently began preparing for the December 31, 2020, year-end audit. The year-end audit will require more work this year because of the company's expansion, specifically the new franchisor transactions. As you prepare for the audit, you review the preliminary income statement, as prepared by for Ontario and Quebec segments (Exhibit I), along with information regarding various transactions that occurred during the year (Exhibit II). VSE prepares its financial statements in accordance with ASPE. Cohbit? Additional Information Regarding the Ontario and Quebec Operations - Before the franchise agreement is signed, there is a period of discussion whereby the general feasibility of the new location is assessed. Market research is conducted and the prospective franchisee's financial strength is examined. VSE incurs all of the costs during this stage. During the year, VSE, franchised seven locations in Ontario and eight locations in Quebec. The franchise agreements were signed during the following months: - As is standard in the franchisee industry, VSE developed a policy to charge an initial franchise fee and a continuing franchise fee. The initial fee of \$225,000 is paid through the following, nonrefundable payments: - The franchisee must pay a down payment of $25,000 when the franchise agreement is signed. Once signed, VSE will provide significant assistance to help the franchisee commence operations (e.g., help select an appropriate location, train employees, develop policies and procedures, provide legal and management assistance); however, the franchise is responsible to pay for all of the direct costs of establishing the new location. - A second payment of $50,000 is due once the franchisee commences operations. It takes approximately four to five months from signing the franchise agreement to commencing operations. VSE's involvement with the franchisee largely ends when the new location commences operations. Five of the seven locations Ontario are open and six of the eight locations in Quebec are open. - The final payment of $150,000 is due within one year of operations commencing. VSE does not have any experience to assess the likelihood of a franchisee surviving its first year. - Each franchisee is required to pay $2,500 per month in a continuing franchise fee for VSE. The continuing franchise fee covers various shared costs, such as regional advertising, software and hardware upgrades, and ad hoc support. - Jason encouraged initial growth by providing a promotional agreement with the first three franchisers. These franchisers were charged an initial franchise fee of $225,000, due upon opening, with no continuing fee for the first three years. All three franchises are open and paid their initial fee. These franchises have been opened for a combined 10 months during the fiscal year. - The following are number of months the franchisees were required to pay monthly franchise fees: No continuing franchise fees were collected from the franchises that signed an agreement in April and May. - During the year, VSE opened and operates two stores in Ontario (Toronto and Ottawa), and one store in Quebec (Montreal). The locations were opened late in the fiscal year but were still able to generate sales during November and December. The Ontario locations sold 30 security systems, while the Quebec locations sold 25 security systems. The security systems during the year were sold for the promotional price of $5,500, which includes the hardware, installation, and a two-year monitoring hardware alone is $6,000, with an additional $500 for installation. Customers can opt out of the two-year monitoring contract, which will reduce the price by $750. In addition, customers who already have the hardware can purchase the monitoring services for $1,250. All systems have been instaled as of the year end. - Jason undertook a large marketing campaign in November and December 2020 with the intention of attracting new franchises and increasing awareness of VSE's service offering. The advertising blitz is going to run into January 2021. Jason believes that the benefits of the marketing program will be realized in the next Accordingly, he capitalized $250,000 in marketing costs as at year end in order to match the costs to sales in future periods