It is December 2014 and Cranmore Inc. recently hired a new accountant, Jodie Larson. Although Cranmore is a private company, it follows IFRS. As part of her preparation of the 2014 financial statements for Cranmore Inc., Jodie has proposed the following accounting changes. 

1. At December 31, 2013, Cranmore had a receivable of $250,000 from Michael Inc. on its statement of financial position that had been owed since mid-2012. In December 2014, Michael Inc. was declared bankrupt and no recovery is expected. Jodie proposes to write off the receivable in 2014 against retained earnings as a correction of a 2012 error.
2. Jodie proposes to change from double-declining-balance to straight-line depreciation for the company’s manufacturing assets because of a change in the pattern in which the assets provide benefits to the company. If straight-line depreciation had been used for all prior periods, retained earnings would have been $380,800 higher at December 31, 2013. The change’s effect just on 2014 income is a reduction of $48,800.
3. For equipment in the leasing division, Jodie proposes to adopt the sum-of-the-years’-digits depreciation method, which the company has never used before. Cranmore began operating its leasing division in 2014. If straight-line depreciation were used, 2014 income would be $110,000 higher.
4. Cranmore has decided to adopt the revaluation method for reporting and measuring its land, with this policy being effective from January 1, 2014. At December 31, 2013, the land’s fair value was $900,000. The land’s book value at December 31, 2013, was $750,000. (Hint: Refer to IAS 8 for the treatment of this specific change in policy.)
5. Cranmore has investments that are recorded at FV-OCI. At December 31, 2013, an error was made in the calculation of the fair values of these investments. The amount of the error was an overstatement of the fair value by $200,000.

Cranmore’s income tax rate is 30%.

Instructions
(a) For each of the changes described above, identify whether the situation is a change in policy, a change in estimate, or the correction of an error. Justify your answer.
(b) For each of the changes described above, determine whether a restatement of January 1, 2014 retained earnings is required. What is the amount of the adjustment, if any? Prepare the required journal entries to record any adjustments.
(c) Prepare the statement of changes in equity. An excerpt from the statement of changes in equity for December 31, 2013, is provided below:

                                

The profit or loss is $1,350,000 and the other comprehensive income is $150,000 (relating to the change in value of the FV-OCI Investment during 2014) for the 2014 year. There were no shares issued or repurchased during the year. There are no other changes to the equity accounts for 2014.
(d) Identify what disclosures are required in the notes to the financial statements as a result of each of these changes.