Identify the type of accounting changes

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Question - The following situations are independent of each other and related to the activities and events of Global Berhad in the year 2018. The financial year end for the company is 31 December.

(i) In the past, the company expensed borrowing costs on construction of its factory. The company has changed its policy this year and now capitalises as it is incurred. In 2017 accounts, borrowing costs expensed was RM2,500,000 and this year's borrowing costs incurred was RM3,800,000. The factory is still under construction.

(ii) A posting errors has been found in the accounts for the year 2017 whereby RM200,000 proceed from the sales of two delivery trucks has been credited to sales.

Required - For each situation, identify the type of accounting changes and discuss the proper accounting treatment.

Reference no: EM132573401

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