AFM 291: Reconciliation

Reconciling AFM 291: MOC (24 Jul 2026, indexes textbook chapter notes) against AFM291_Inventory_and_Gap_Map.html (14 Aug 2026, indexes course delivery: 264 files).

Phase 1: Conflict resolution

Conflict 4, answered plainly

The MOC's top priority is closed on content and wide open on artifact. Ch8_PPE_Complete_Study_Guide.md is a different kind of object from a vault chapter note, it is a reference document, not a study tool.

On content it is not marginal, it is sufficient. Every single dependency Chapter 10 rests on is present at working depth: the IAS 16 cost model, elements of cost (¶7, ¶16, Exhibit 8-1), borrowing costs with the Exhibit 8-4 capitalization ceiling, depreciation across all three methods with full schedules (Exhibits 8-11→8-16), componentization (¶9/¶43/¶45), derecognition (Exhibits 8-17→8-19), changes in estimate re-solved three ways (Exhibit 8-15), and asset retirement obligations worked to a 20-year accretion schedule (Liverpool Linens, PV $107,274 → $500,000). Every schedule was recomputed and ties. It correctly defers revaluation and impairment to Chapter 10 rather than duplicating them. Someone who works through it can execute Chapter 10's elimination method, proportional method and post-revaluation depreciation without further preparation. The MOC's warning ("Revaluation, impairment, and post-revaluation depreciation all assume you have PPE cold") is answered.

On artifact it fails every house test. No YAML frontmatter, no tags, no wikilinks, so it appears in no MOC row, no Standards Index entry, no cross-chapter thread, and Chapter 10's dangling reference to it stays dangling. Zero Obsidian callouts, so nothing collapses: CP8-1→CP8-9 all show their answers, and CP8-1→CP8-5 appear only in an end-of-file recap, never at the point of learning. The MOC names that exact property as the vault's whole design premise"Checkpoints and retrieval questions are collapsed by default… That single design choice is what turns these notes from reference documents into study tools." By that standard this is a reference document.

And filing it unchanged would be actively unsafe under the MOC's own provenance rule. It carries 16 paragraph-level citations: IAS 16 ¶7, ¶9, ¶12–13, ¶24–26, ¶31, ¶43, ¶45, ¶60, ¶62; IAS 23 ¶8, ¶10, ¶14; IFRS 2 ¶10; ASPE 3850, 3061.14–.15, 3831, none flagged [VERIFY]. Since "anything unlabelled is sourced from your textbook," dropping it in would silently assert all 16 as textbook-verified. It also has two genuine provenance defects: the TELUS Exhibit 8-22 continuity schedule does not roll forward (network assets foot to $35,809M against a stated $36,036M; only net book values tie, consistent with an excerpted table, but unmarked), and the §E.2 general-borrowing illustration uses a debt-ratio proration that contradicts the capitalization-rate mechanic taught in §A.3.

Verdict: the research is done; the note is not built. This is a 3–4 hour conversion, not a "go find the chapter" job. Reclassified below from 🔴1 to 🟠1.

The same verdict applies to Chapter_5_Cash_and_Receivables_Notes.md and chapter_7_financial_assets_notes.md, and both are slightly further from house standard than the Chapter 8 file: neither has a single decision flowchart (the Ch.8 file has three Mermaid diagrams) and neither has an exam-traps section at all.

Corrections to apply to the MOC

Phase 2: The compounding risk

Verification results: 14 Aug 2026

Method and its limit, stated up front. The CPA Canada Handbook Part I (Knotia) is paywalled and was not reached. Everything below is checked against ifrs.org standard text (Tier 1) and AASB compiled standards (Tier 2), national reproductions of the same IASB text. Where two independent sources returned word-identical text I have said so. All four items remain [VERIFY] against your authoritative source. Nothing here is upgraded to settled.

⚠️ IAS 36.105: the note is missing the second sentence

Verbatim, from ifrs.org and AASB in agreement:

"In allocating an impairment loss in accordance with paragraph 104, an entity shall not reduce the carrying amount of an asset below the highest of: (a) its fair value less costs of disposal (if measurable); (b) its value in use (if determinable); and (c) zero. The amount of the impairment loss that would otherwise have been allocated to the asset shall be allocated pro rata to the other assets of the unit (group of units)."

Chapter 10 has the three-part floor. It does not state the reallocation rule as the standard's own words. This matters: the reallocation is the computationally testable half, and because the floor operates asset-by-asset, reallocation can cascade, an asset that hits its own floor on the second pass triggers another round. Chapter 10's Exhibits 10-11/10-12 do perform a reallocation ($30,000 reallocated 75/25), so the mechanic is demonstrated; what is missing is the authority sentence behind it and any note that it can cascade. Add the second sentence to Chapter 10 and keep the [VERIFY].

⚠️ IAS 38.57(d), the note overstates the market-evidence test

The note renders criterion 4 as "how it will generate probable future economic benefits, including demonstrating the existence of a market…". The standard's actual framing:

"(d) how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset."

Market evidence is illustrative, one route to satisfying the benefits test, not a mandatory sub-condition. Written as "including demonstrating," it reads as a seventh hurdle. On a case asking you to apply the criteria to an internally-developed intangible with no external market, that distinction decides the answer. Also add the lead-in: recognition requires all six, "if, and only if."

⚠️ IAS 8 has been renamed: relevant because AFM 291 teaches IFRS 18

Per ifrs.org: IFRS 18 (issued April 2024) replaced IAS 1, carried some IAS 1 requirements into IAS 8, and changed IAS 8's title to Basis of Preparation of Financial Statements. IFRS 18 is effective for annual periods beginning on or after 1 January 2027, early application permitted.

• As of today the effective version is still IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
• The definitions survived at paragraph 5 in both the pre- and post-IFRS 18 versions. Both terms confirmed:
• "Retrospective application is applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied."
• "Retrospective restatement is correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred."
• Because IFRS 18 added carried-over content, other IAS 8 paragraph numbers may have shifted. Any IAS 8 citation other than ¶5 should be treated as unverified. Chapter 3 currently cites no other IAS 8 paragraph, so this is a forward-looking caution.
• Knotia typically carries both an effective and a future version. Worth asking which one AFM 291 examines, the course already teaches IFRS 18 as forthcoming.

What could not be verified at all

1. The CPA Canada Handbook Part I itself, the only source that settles any of this. Paywalled, not reached. All four stay [VERIFY].
2. Current-version IAS 36 text. The 2023 ifrs.org PDF hit a login wall; the readable text was the 2021 issue plus an AASB compilation current to 2021. No amendments to ¶105 or ¶124 are known to me, but I did not verify that and will not assert stability I did not check.
3. IAS 38 was single-source: AASB only, no Tier 1 retrieval, no cross-check.
4. Whether IAS 8 paragraphs other than ¶5 shifted under IFRS 18.
5. CPA Canada's IFRS 18 adoption timing for Part I, a question for your instructor, not for me.

The open instructor question: "realizable value" vs "fair value"

Flagged in six places in Chapter 2. The inconsistency is internal to your textbook:

• Exhibits 2-3 and 2-9 (the populated Framework diagram, and the IFRS/ASPE comparison row) label the third measurement basis "realizable value."
• Section B.6 prose calls the same basis "fair value," and defines it as "the amount obtainable from selling an asset… in an orderly transaction (not a forced/fire sale)", which is an IFRS 13 fair-value definition.
• No reconciling passage exists anywhere in the source. Chapter 2 asserts they are the same basis and tells you to confirm.

Why it has a computable consequence, and therefore deserves an instructor's time. Chapter 2's own Exhibit 2-8 states that fair value ignores transaction costs entirely, at both entry and exit. But "realizable value" in Canadian usage normally means net realizable value, selling price less costs to complete and sell, which is exactly the basis Chapter 6 uses for lower of cost and NRV. The two terms diverge by the selling costs. Ask it in this form:

In Chapter 2, Exhibits 2-3 and 2-9 label the third measurement basis "realizable value" while Section B.6 defines it as fair value, an orderly-transaction exit price. On an AFM 291 exam, should I treat these as the same basis? Specifically: does the "realizable value" basis in the Framework deduct costs to sell, the way net realizable value does under IAS 2 and Chapter 6? Or does it exclude transaction costs entirely, the way IFRS 13 fair value does? And which term do you want in a written answer?

Reissued Live Gap Register

Struck through = closed by the other index. 🟠 = downgraded. Bold = newly discovered.

Closed or downgraded

Still open, unchanged

Newly discovered: content errors

Newly discovered: structural

Chapter 1: the resolution

Keep it as step 1, but scope it and relabel it. It is not assigned reading; it is prerequisite.

Word counts across Chapter 2's full text settle it: "moral hazard": 0. "adverse selection": 0. "earnings management": 0. "agency" (3, all of them "Pollution Control Agency." "information asymmetry") 3, every one a backward reference to Chapter 1. Efficient markets appears only as two bare callout labels, one annotated "(from Chapter 1)". Five of the six concepts are introduced in Chapter 1 and are not covered by Chapter 2. Only relevance vs. reliability is re-covered, and Chapter 2 supersedes it, since "reliability" was replaced by representational faithfulness in 2010.

Later chapters invoke them by name: Chapter 4 §A opens on an Information Asymmetry threshold callout referring back to Chapter 1; Chapter 4 §F.1 labels cost-plus contracts "a moral hazard problem (Chapter 1)"; Chapter 3 Part F justifies retrospective restatement in earnings-management terms. The MOC's own Earnings Management thread starts at Chapter 1 and has no other origin.

That is ~55–60% of the chapter, all load-bearing, none available elsewhere in the vault.

Next: AFM 291: Study Plan