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Will this note payable be classified as current liability

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Reference no: EM132880097

Problem - Liabilities-ASPE: Gaudet Industries Ltd. has a $5,000,000 note payable outstanding. The terms of the note require repayment of principal on 30 June 20X2. The company is now finalizing the financial statements for the year ended 31 December 20X1. In January 20X2, before the financial statements are released, the company comes to an agreement with the lender to refinance the liability, with the new due date 30 June 20X5. Gaudet also has committed to donate $200,000 to support the provincial snowboarding association race programs for the year. No donation agreement has yet been signed, but a public announcement has been made, and the company and snowboarding association have met and agreed to the races the funding will support for the season, and promotion of Gaudet Industries Ltd. through its website.

Required -

1. If Gaudet complies with IFRS, will this note payable be classified as current or long-term liability as at 31 December 20X1?

2. If Gaudet complies with IFRS, will the $200,000 amount be recorded as a liability? Explain.

3. Repeat requirements 1 and 2, assuming that Gaudet complies with ASPE.

Reference no: EM132880097

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