Accounting: Concepts and Principles

Running head: ACCOUNTING: CONCEPTS AND PRINCIPLES
Accounting: Concepts and Principles
Name of the Student
Name of the University
Author’s Note

1ACCOUNTING: CONCEPTS AND PRINCIPLES
Table of Contents
Answer to Question 1......................................................................................................................2
Answer to Question 2......................................................................................................................4
Answer to Question 3......................................................................................................................5
References........................................................................................................................................6

2ACCOUNTING: CONCEPTS AND PRINCIPLES
Answer to Question 1
There are some key accounting policies that have critical importance for Cineplex and the
industry; and the company is needed comply with these policies. For the preparation of the
consolidated financial statements of the business, Cineplex complies with the Canadian generally
accepted accounting principles, known as Canadian GAAP. The definition of this rules can be
seen in International Financial Reporting Standards (IFRS) as set out CPA Canada Handbook –
Accounting. The application of acquisition method can be seen by Cineplex for the purpose of
business combination. For the purpose of valuation, the company uses the fair value accounting.
The recognition of the financial assets and the liabilities is done based on the fair value (Kim, Shi
and Zhou 2014).
It needs to be mentioned that Cineplex operates in the film and media industry; and for
this reason the company has to follow some specific accounting rules and policies. When
comparing the financial and accounting regulation of Cineplex with any airline company of the
airline industry, it can be seen that there are some similarities as well as differences in the
accounting policies. The following discussion shows some of the different as well as similar
principles in the accounting policies of Cineplex and Air Canada, an airline company.
Similarities
Both the companies that are Cineplex and Air Canada follows the principles of Canadian
GAAP as set out in the CPA Canada Handbook.