Soccer Incorporated Case

Dear players at Soccer Incorporated (SI),

Here is my report on recommended alternatives on accounting policies for events that occurred in 2012.

Users and Objectives

SI borrowed a large amount of money, in 2012, to build the stadium. As a public corporation, SI also does not seem to be very reliant on public funds. The purpose of the financial statements is to provide users, which includes shareholders, future shareholders and creditors, information so they can make decisions on whether to invest or to extend credit to SI. As such, because of the lack of dependence on public funds and reliance on the bank loan for funding, I have identified the bank as the primary user of the financial statements. The bank’s objective is to ensure that the company can repay both principle and interest, as well as the company remains onside on its debt/equity covenant. Shareholder, were identified as the second most important users, as their objective is to ensure compliance with debt obligations and to ensure that the company remains profitable. As players, your main objective is to check if SI’s net income exceeded $25 million, in order to verify if you are eligible for bonuses for FY 2012. The CRA and Securities Commission are the final users that we have identified, whose main objective is to ensure compliance with the Income Tax Act and Securities Act. Being a publicly listed company, SI has obligations to follow rules as set forth by the securities commission. With the aligned vision among the bank, players, and owners, I have made recommendations to maximize owner’s equity, cash flow and return on investment

Constraints:

SI is a public corporation, as such a GAAP constraint exists that the company has to either to use IFRS or ASPE. Using IFRS, makes the statements more reliable and credible. IFRS, also increases statements comparability with other similar publicly listed firms. It is also helpful when the company wants to raise financing from the public. ASPE is useful...