Maurice Ltd. is a private Canadian company. It has been preparing its financial statements in accordance with IFRS but is now considering a change to ASPE. For its Year 6 financial statements, Maurice reported the following in accordance with IFRS:

Net income	$3,200	Total debt	$25,400
Current assets	13,800	Total shareholders' equity	21,700
Current liabilities	10,900

You have identified the following three areas in which Maurice's accounting policies have differences between IFRS and ASPE:

1. Impairment losses
2. Convertible bonds
3. Income taxes

The controller at Maurice provides the following information with respect to each of these accounting differences and indicates that the Year 6 financial statements reflect the proper accounting for these items in accordance with IFRS:

Impairment Losses

Impairment tests were performed on the company's equipment for Years 5 and 6 with the following results:

	December 31, Year 5		December 31, Year 6
Cost of equipment	$26,000		$26,000
Accumulated depreciation	5,200		6,240
Carrying amount before impairment	20,800		19,760
Undiscounted future cash flows	19,700		18,200
Value in use	19,100		18,300
Fair value	17,900		18,400
Depreciation expense for year	1,040		1,040

At the end of Year 5, the equipment had an estimated remaining useful life of 20 years. There were no impairment losses prior to Year 5.

Convertible Bonds

Maurice issued bonds for proceeds of $15,000 on January 1, Year 5. The bonds are convertible into common shares at any time within the next five years. The bonds would have been worth only $13,900 if they did not have the conversion feature. The amortization of the discount on bonds was $57 in Year 5 and $58 in Year 6.

Income Taxes

Maurice's income tax rate has been and is expected to continue at 40%. The financial statements reflect the future taxes payable method of accounting for income taxes and contain the following amounts:

	December 31, Year 5	December 31, Year 6
Future income tax payable	$4,700	$4,910
Future income tax expense	205	210

The CEO is concerned about the impact of converting Maurice's financial statements from IFRS to ASPE on the following metrics: current ratio, debt-to-equity ratio, and return on total shareholders' equity. Where ASPE provides an accounting policy choice, he wants to choose the method that is most simple and straightforward.

Required:

(a) Calculate the three ratios first using IFRS and then ASPE. schedule showing any adjustments to the numerator and denominator for these ratios. Ignore income taxes on the impairment losses and convertible bonds. (Round the final answers for all the ratios to two decimal places. Omit $ and % sign in your response.)

	IFRS	ASPE
	$			$
Current ratio		=			=
	$			$
	$			$
Debt to equity		=			=
	$			$
	$			$
Return on total equity		=	%		=	%
	$			$

(b) Determine whether Maurice's liquidity, solvency, and profitability look better or worse under ASPE after considering the combined impact of the three areas of difference.

	Under ASPE
Liquidity	(Click to select) Look better Look worse Remains the same
Solvency	(Click to select) Look better Look worse Remains the same
Profitability	(Click to select) Look better Look worse Remains the same