Reference no: EM132610133

Question -

Facts about LarPower

A. Operates in the oil industry.

B. Is a US subsidiary of a British company.

C. Reports to its parent under IFRS.

D. Reports to its US-based lender under US GAAP.

E. Cleans up any soil contamination when so legally required by the country in which it contaminates any soil.

Facts about Country Q:

A. One of the countries in which LarPower operates

B. Has no legislation requiring cleanup

C. LarPower has inadvertently contaminated soil there for years.

D. As of December 31, 2020, a law requiring cleanup of contaminated soil will almost surely be passed.

E. This new cleanup law will likely not be issued until after year-end.

Questions -

1. Must LarPower recognize a provision for the cleanup cost in its reporting to its British Parent as of 12/31/2020?

2. What about in its reporting to its US-based Lender?

3. Say the new legislation in Country Q will require much re-training of LarPower's employees who are based in Country Q. This training will occur after 12/31/2020. Must LarPower recognize a provision for the retraining in its reporting to its British Parent as of 12/31/2020?

4. What about in its reporting to its US-based Lender?