differences between asset impairment under U.S. GAAP and IFRS.

 

1. Discuss the issues the lease agreement raises from an ethical and financial reporting point of view.

2. Tom Twitlet, president of Twitlet Corporation, is considering establishing a compensatory share option plan for the company’s 20 top executives. Tom wants to set the terms of the plan so that the number of options the executives can exercise increases based on a specified increase in the company’s future earnings. Tom wants to make sure that the plan cannot be manipulated but, in addition, it should properly motivate the executives to stay with the company and make it successful. Given this concern, he wants to know how the increase in earnings should be specified: Should it be a dollar amount or a percentage change, and should the change in earnings be compared to the company’s past results or against industry results? He also is interested in understanding how to determine the service period of the plan. Finally, Tom wants to understand the accounting for the plan and how it will affect the company’s financial statements. Prepare a memo that explains the issues involved in the terms used in this plan.  Discuss the accounting for the terms of this type of compensatory share option plan. has been making losses, and is expected to continue making losses for a few more years. Discuss the issues raised from a financial reporting and ethical perspective.

3. Use the Internet to research recent articles (within the last two years) on fair value measurement of assets for financial reporting.  Evaluate the potential interaction of IFRS13 fair value measurement with other IFRS fair value measurement standards. Create an argument for the increased disclosure requirements under IFRS 13 as compared to other IFRS standards addressing fair value measurement. Provide support for your argument.

4. Compare and contrast the differences between asset impairment under U.S. GAAP and IFRS.  What are the financial statement implications of these differences?

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