Refer to the specimen financial statements at the end of the book, which show excerpts from the 2017 year-end financial statements, including the accompanying notes, of Hudson’s Bay Company. The full financial statements are available on SEDAR. In the notes, the company refers to the adoption of new or revised accounting standards in the current year, and future changes in accounting standards—those new standards that have been issued but are not yet effective. The company also provides disclosure in Note 3 about areas in its accounting where significant judgement has to be exercised and where there is a significant degree of measurement uncertainty.
Instructions
a. Review Note 2 of Hudson’s Bay Company’s financial statements. Indicate what accounting standard(s) have been adopted or changed by the company in the year and explain when the new standard(s) were applied, how they were applied, and what the effect was on the financial statements.
b. Identify what new or revised standards have been issued but are not yet effective. What information does the company provide on these upcoming standards? If not yet applied, do you think the standards identified might have a significant impact on future financial statements? Briefly explain.
c. Identify the key judgements and estimates required by management in relation to the financial statements and briefly explain the issues. Are these significant to the company’s operations? Discuss briefly by relating them to the business that Hudson’s Bay is engaged in.
d. Briefly explain why accounting standards require the information identified in part (c) to be disclosed.
