A4-22 Contingencies (LO4.8): Unlimited Possibilities Ltd.(UPL) is finalizing the financial statements for 20X5....
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A Contingencies LO: Unlimited Possibilities LtdUPL is finalizing the financial statements for X The company's managers are uncertain how each of the following events and situations should be reported: a UPL is the guarantor on a $ million bank loan that was obtained by another company controlled by the same shareholders who control UPL. The amount of the guaranteed loan is a material amount for UPL. b UPL has a subsidiary in Japan. UPL has reached an agreement to sell the Japanese subsidiary to a Taiwanese company, subject to approval by regulators in Japan. When the sale closes, UPL will realize a profit of $ million as the purchase price is $ million higher than the subsidiary's net book value. Approval is expected, but it will be at least six months before the regulators issue their final ruling. c An existing customer declared bankruptcy in February x Required: Discuss the appropriate reporting for each of these three items on UPL's X financial statements assuming UPL confirms to IFRS. 
A Contingencies LO:
Unlimited Possibilities LtdUPL is finalizing the financial statements for X The company's managers are uncertain how each of the following events and situations should be reported:
a UPL is the guarantor on a $ million bank loan that was obtained by another company controlled by the same shareholders who control UPL. The amount of the guaranteed loan is a material amount for UPL.
b UPL has a subsidiary in Japan. UPL has reached an agreement to sell the Japanese subsidiary to a Taiwanese company, subject to approval by regulators in Japan. When the sale closes, UPL will realize a profit of $ million as the purchase price is $ million higher than the subsidiary's net book value. Approval is expected, but it will be at least six months before the regulators issue their final ruling.
c An existing customer declared bankruptcy in February x
Required:
Discuss the appropriate reporting for each of these three items on UPL's X financial statements assuming UPL confirms to IFRS.
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