SOLVED

3) A company is required to disclose information that enables users to evaluate the significance of financial liabilities on its financial position and performance. Required: List 8 essential aspects that disclosure over financial liabilities should cover: Answer: a)The nature of contingent liabilities. b)A summary of the accounting policies used to determine the measurement basis of valuing liabilities–for example, amortized cost. c)Pertinent details of the indebtedness, including collateral pledged and call or conversion privileges. d)The fair value of each class of financial liability and how this was determined–for example, discounted cash flow analysis. e)Total interest expense on liabilities other than those valued at fair value through profit and loss. f)A schedule that details the contractual maturity dates of financial liabilities. g)The nature and extent of risks arising from financial liabilities, including ?credit risk, liquidity risk, and market risk. h)Details of any obligations in default, including the carrying amount of loans in default at statement date. 4) Contrast the differences between IFRS and ASPE for financial liabilities using the following table: ISSUE IFRS ASPE Amortization of premiums and discounts on financial liabilities Increase the provision for site restoration costs due to the passage of time