What approach to profit measurement has been adopted

Assignment Help Financial Accounting
Reference no: EM132641156

Assume that you are a new accounting graduate that has obtained a position at Grant Thornton Australia in Sydney. Your client informs you that they have discovered that depreciation expense of their company for 2019 was understated by $20 000. This client seeks your advice on whether this retrospective restatement to correct prior-period errors should be included in their comprehensive income in 2019. Your line manager asks you to advise your client referring to AASB 101 and your advice should cover the following points:Assume that you are a new accounting graduate that has obtained a position at Grant Thornton Australia in Sydney. Your client informs you that they have discovered that depreciation expense of their company for 2019 was understated by $20 000. This client seeks your advice on whether this retrospective restatement to correct prior-period errors should be included in their comprehensive income in 2019. Your line manager asks you to advise your client referring to AASB 101 and your advice should cover the following points:

Problem (1) What approach to profit measurement has been adopted by Australian Accounting Standard setters?

Problem (2) How should prior-period errors be reported?

Reference no: EM132641156

Questions Cloud

Are any incentives for client to deliberately misstate : Assume that you are a new accounting graduate,Are there any incentives for your client to deliberately misstate the depreciation charges in the previous period?
Calculate the wear coefficients for bronze and steel : Calculate the wear coefficients for bronze and steel if hardness and density of steel and bronze are 2.4 GPa, 0.8 GPa, 7.8Mg/m3 and 8.4Mg/m3 respectively.
Calculate the percentage contribution of adhesive : The interfacial shear strength is one-tenth of the bulk shear strength of the softer metal. For an experimentally measured coefficient of friction of 0.45 for t
What was other comprehensive income during year : Steckly Company had the following balances on its balance sheet at Beginning of Year 2. What was "Other Comprehensive income" during Year 2
What approach to profit measurement has been adopted : Assume that you are a new accounting graduate, What approach to profit measurement has been adopted by Australian Accounting Standard setters?
Fuel requirement for the prime mover : A well, is producing 584 bbl per day of fluid having a specific gravity of 0.90. Pump setting depth is 5125 ft, pumping fluid level is 3200 ft, and tubing pre
Calculate synchronous pumping speeds : Calculate synchronous pumping speeds for a 5000 ft string of sucker rods for 1st, 2nd, 3rd, 4th, and 5th order of synchronization.
How should prior-period errors be reported : Outline the arguments for and against the exclusion of prior-period adjustment adjustments (such as the effects of errors and accounting policy changes)
What is the below ground efficiency for installation : What is the below ground efficiency for this installation if a dynamometer test shows a polished rod horsepower of 7.4 hp?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine what is present value to be received at end

What is the present value of $31,600 due 15 periods from now, discounted at 6%? (Round answer to 2 decimal places, e.g. 25.25.)

  Firm failed to record premium amortization

In the previous year, a firm failed to record premium amortization of $40,100 and $28,900, respectively, on its bonds payable and held to maturity bond investments. These errors affect both income before tax and taxable income. The firm's tax rate is..

  What would you consider when reviewing a budget

What would you consider when reviewing a budget?Under what conditions is a flexible budget more effective than a forecast budget?

  What impact does the purchase of treasury stock have

What impact does the sale of treasury stock for an amount higher than the purchase price have on the statement of cash flows

  Companies direct material usage variance for current year

Expected to sell 8000 units but actually produced and sold 8500 beds. Direct material 5 yards at $1.50 per yard Direct labor is 40 minutes at $20 per minute In the current year 44,000 yards were purchased and used at a cost of $1.60 per yard and 365,..

  How will your venture be socially responsible

You have invented a personal submarine that can operate at about 10-20 feet below the surface of the ocean or a lake. It has windows for viewing. Describe your strategy in one or two sentences that could be circulated to your employees and allies. 5...

  Determine the monthly payment on a year level payment

Determine the monthly payment on a 30-year level payment mortgage assuming an annual mortgage rate of 5% and an initial mortgage principal of $400,000.

  Costs assigned to the ending work in process inventory

Taco Ranch uses a process cost system and the weighted average cost flow assumption. Production begins in the crafting department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the pro..

  Determine the ending account balances

Test the equality of the debit and credit balances of the T-accounts by preparing a trial balance. determine the ending account balances.

  What are the pros and cons of ratio

What are the pros and cons of ratio, vertical, and horizontal analysis. What do they tell us? Why do we need so many different methods?

  How to prepare the journal entries for the month of march

Prepare the journal entries for the month of March, 2020. A new laptop was purchased for the office to update their equipment. The price of the laptop.

  Basis in the equipment received in the exchange

During 2015, Paul sells residential rental property for $280,000, which he acquired in 1995 for $145,000. Paul has claimed straight-line depreciation on the building of $54,500. What is the amount and nature of Paul's gain on the sale of the rental p..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd