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You get just enough time to catch your breath and a cup of coffee (the donut tray was all empty) when Mr. Ackque Feegerz turns up. Upon seeing you in the corridor, he exclaims, What! Are you loitering around once again? When are you planning to do some actual work here? Maybe I made a serious mistake in selecting you instead of that other bright candidate. You mumble that File I was completed and you were about to begin on the second file. Well hurry up and do something useful. Just dont stand around listening to the birds tweeting, he retorted as he strode away towards his office. And you returned for File II.

You learn that DCI has a $5,000,000 note payable outstanding. The terms of the note require repayment of principal on June 30, 20X2. The company is now finalizing the financial statements for the year ended December 31, 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 June 30, 20X5.

DCI also has committed to donate $200,000 to support the provincial snow boarding association race programs for the year. No donation agreement has yet been signed, but a public announcement has been made and the company and the snow boarding association have met and agreed that the funding supporting the races for the season, and promotion by DCI will be publicized through the associations website.

Required:

1. a] If DCI complies with IFRS, will the note payable be classified as current or long-term as at December

   31, 20X1? Provide your explanation in sufficient detail.

2. b] If DCI complies with ASPE, repeat the requirements for part [a] above.

3. c] If DCI complies with IFRS, will the $200,000 amount be recorded as a liability? Explain.

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