The following Profit and Loss Statement was prepared by a graduate accountant for Formix Ltd. Forex Ltd is a long-standing company operating in the US with several subsidiaries. Discuss in detail which items in the statement do not comply with AASB101’s disclosure requirements and why.

 

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Profit from operations Income from government bonds Dividends from subsidiaries Income tax expense Profit for year Retained profits at 1 July 2014 Profit and Loss Statement for the year ended 30 June 2015 Interim dividends paid-preference shares -ordinary shares Final dividends declared-preference shares ordinary shares Transfer to general reserve Retained profits at 30 June 2015 $ (6000) (100 000) (6000) (125000) Depreciation Debenture interest Employee benefits Impairment of receivables Audit and tax $300 000 40000 50000 $(237 000) (50000) Additional information relevant to the presentation of these financial statements, but not included as part of them, is as follows: (a) Profit from operations is after charging: 10000 20000 $ 500 000 12500 7500 520000 (250 000) 270 000 67 000 337000 (287 000) $ 50000 (b) Freehold land was revalued by directors at the end of the current year at $600 000, an increase of $100 000. Buildings on the land were valued at cost $400 000 less accumulated depreci- ation $180 000. Profit from operations Income from government bonds Dividends from subsidiaries Income tax expense Profit for year Retained profits at 1 July 2014 Profit and Loss Statement for the year ended 30 June 2015 Interim dividends paid-preference shares -ordinary shares Final dividends declared-preference shares ordinary shares Transfer to general reserve Retained profits at 30 June 2015 $ (6000) (100 000) (6000) (125000) Depreciation Debenture interest Employee benefits Impairment of receivables Audit and tax $300 000 40000 50000 $(237 000) (50000) Additional information relevant to the presentation of these financial statements, but not included as part of them, is as follows: (a) Profit from operations is after charging: 10000 20000 $ 500 000 12500 7500 520000 (250 000) 270 000 67 000 337000 (287 000) $ 50000 (b) Freehold land was revalued by directors at the end of the current year at $600 000, an increase of $100 000. Buildings on the land were valued at cost $400 000 less accumulated depreci- ation $180 000.

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AASB101s requires certain disclosure which helps in fair presentation of financial statement a Profi... View the full answer