Topic 1 Examples document

Topic 1
Examples document

Draft Statement of Comprehensive Income for the year ended

Profit or loss

OCI

Total Comprehensive Income
$

Draft Statement of Changes in Equity for the year ended
Opening equity i.e. from slide 46 = equity1

Closing equity i.e. from slide 46 = equity2
$
Example 2: A new accounting policy involving retrospective application
Information:
1. In the year ended 31 March 2013 an entity changed its accounting policy in relation to training costs. As per NZ IAS 38 Intangible Assets these costs have to be expensed. The training costs in the current year were $4,500.
2. The old policy capitalised the training costs i.e. in the years previous to 2013 the entity treated training costs as an asset.
3. The total previous training costs were:
- 31/3/2012, last year $6,000
- 31/3/ 2011, previous year $12,000.

Journal entries that have ALREADY been prepared and posted:
Dr
Cr
YE 31/3/2011
Dr Training costs asset

Cr Cash

Effect on income statement?
YE 31/3/12 i.e. last year
Dr Training costs asset

Cr Cash

Effect on income statement?
YE 31/3/13i.e. this year
Dr Training costs expense

Cr Cash

Effect on income statement? i.e. comparative figures
Unadjusted Draft Income Statement
2013
2012
Sales
200,000
180,000
Expenses
120,000
110,000
PBT
80,000
70,000
Tax expense
24,000
19,200
PAT = Total comprehensive income (TCI) as no OCI
$56,000
$50,800

Unadjusted Draft Statement of Changes to Equity

Opening equity
650,800
600,000
Plus PAT
56,000
50,800
Closing equity
706,800
650,800