Discuss the accounting treatment and disclosure for each of the following events and transactions: i. In...

 

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Discuss the accounting treatment and disclosure for each of the following events and transactions: i. In 2018, the entity voluntarily changed an accounting policy. The cumulative effect of the change in accounting policy is a decrease of RM100,000 in retained earnings at 1 January 2018, i.e., the beginning of the current reporting period. The entity presents two years of comparative information and has calculated that the effect of the change in accounting policy is RM25,000 less profit for each of the past four years. (3 Marks) The facts are the same as above (i). However, since retrospective application requires significant estimates of amounts and to distinguish objectively information about those estimates is impossible; thus, unlike (i), it is impracticable for the entity to determine the individual period effects of the change in accounting policy on the prior periods presented. (3 Marks) Discuss the accounting treatment and disclosure for each of the following events and transactions: i. In 2018, the entity voluntarily changed an accounting policy. The cumulative effect of the change in accounting policy is a decrease of RM100,000 in retained earnings at 1 January 2018, i.e., the beginning of the current reporting period. The entity presents two years of comparative information and has calculated that the effect of the change in accounting policy is RM25,000 less profit for each of the past four years. (3 Marks) The facts are the same as above (i). However, since retrospective application requires significant estimates of amounts and to distinguish objectively information about those estimates is impossible; thus, unlike (i), it is impracticable for the entity to determine the individual period effects of the change in accounting policy on the prior periods presented. (3 Marks)

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ANSWER STEP 1 i The entity should disclose the nature of the change in accounting policy the reasons ... View the full answer