Question 1. Provide some examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss.

Question 2. On 30 June 2023, the end of the current reporting period, Lynch Ltd made a decision, using the information obtained over the past few years, to revise the useful life of a particular item of its buildings acquired ten years earlier for $2 000 000. The useful life was revised from being a total of 25 years to being a total of 15 years. The building was originally depreciated on the straight-line basis over its useful life and it was expected that the asset would have no residual value. No depreciation has been provided in the current period.

REQUIRED

(a) Prepare the journal entry to account for the change in accounting estimate.

(b) Assuming that the change in accounting estimate had a material effect on financial performance for the period, prepare the appropriate supporting note.

Question 3. What is non-IFRS financial information? Discuss how ASIC's RG230 could be applied to minimise the provision of non-IFRS financial information that could be misleading to investors.

Question 4. During 2020, Point Addis Ltd commenced the construction of a windfarm for its own use. During the reporting period ending 30 June 2023, a change in accounting standards means that the directors are required to change the company's treatment of borrowing costs incurred in the construction of assets for its own use. In previous periods Point Addis Ltd expensed such costs, but must now capitalise them as part of the construction cost in line with the requirement of AASB 123. The unadjusted statement of profit or loss and other comprehensive income and statement of changes in equity for the reporting period ended 30 June 2023 are detailed below.