Reference no: EM133020028

Question -

Q1. Twin Peaks Limited (TPL) has income taxes payable of $265,000, PST payable of $200,000, net GST payable of $174,000, accrued vacation payable for employees of $860,000, royalties do to the BC government of $30,000, estimated lawsuit liability of $500,000, Asset Retirement obligation of $176,000, estimated warranty liability of $126,000. What is the value of TPL's financial liabilities (itemize if required) and what conditions must exist in order to be classified as a financial liability?

Q2. Commercial Drive Limited (CDL) an IFRS reporting company, at December 31, 2019 year end has $1,000,000 in debt due in 2025. On January 28, 2020, before the 2019 financial statements were formally issued, CDL's auditors identified that a working capital ratio requirement included in the debt agreement had not been met for much of 2019. Management immediately contacted the lender who provided a written waiver relieving CDL of this requirement for 2019 only. How, with explanation, would this liability be reported on a properly classified Statement of Financial Position as at December 31, 2019?

Q3. Rolls-Royce Canada Limited, located in Montreal, services aero-engine repairs and maintenance for major North American airlines. Its primary revenue stream is in US dollars as 90% of its customers are US based airlines. The parent company, Rolls-Royce plc., in the UK, has a policy of billing all subsidiaries worldwide requiring aero engine parts in US dollars and this purchase activity comprises 98% of the company's parts and materials procurement. Based on the information provided, does Rolls-Royce Canada Limited have to adopt Hedge Accounting? Explain fully why or why not.