The financial statements of The North West Company Inc. are presented in Appendix B, followed by the financial statements for Sobeys Inc. in Appendix A.
Instructions
(a) Compare the statements of financial position of the two companies.
1. North West has an "other asset" that includes an investment in a jointly controlled (significantly influenced) entity. What model or method of accounting do you think the company should use for this investment?
2. Sobeys has an investment in an associate (affiliate) that is a private company with no determinable fair value and there is no intention of trading these shares. What model or method of accounting do you think the company should use for this investment?
(b) Compare the income statements of each company. Why does neither of these companies report any items on the income statement pertaining to its investments?
(c) Which company had the largest other comprehensive income? Although this other comprehensive income did not relate to investments, to what account was this OCI closed out at the end of the year?