IFRS4.5 The income statement for a British company, Avon Rubber plc, is presented as follows. Avon prepares its financial statements in accordance with IFRS.
A. Review the Avon Rubber income statement and identify at least three differences between the IFRS income statement and an income statement of a U.S. company as presented in the chapter.
B. Identify any irregular items reported by Avon Rubber. Is the reporting of these irregular items in Avon's income statement similar to reporting of these items in U.S. companies' income statements? Explain.
A) |
The differences between the IFRS income statement and an income statement of a U.S. company are: |
1) Terminology—Interest revenue and expense are referred to as Finance Income and Finance cost, and Avon uses the term exceptional for unusual items. This should not be confused with the term “extraordinary” in U.S. GAAP. IFRS does not allow extraordinary item reporting. |
2) Units of currency—Avon reports in pounds sterling and Earnings per share in pence |
3) Avon provides a breakout of operating profit into before
exceptional items and exceptional items are
disclosed either on the face of the income
statement (I/S) or in the notes. |
4) The difference between U.S. GAAP and IFRSs in the classification of discontinued operations is that U.S. GAAP preclude discontinued-operations classification when continuing involvement exists while IFRSs do not. |
B) |
The irregular items reported by Avon Rubber are Exceptional items and the Discontinued operations .As in the U.S., these items are included in the measurement of income but they are separate from OperatingProfit, likely due to their non-recurring nature. IFRS companies also report interest revenue and expense under a separate heading in the income statement. |
IFRS4.5 The income statement for a British company, Avon Rubber plc, is presented as follows. Avon...
Calculate gross profit margin (gross profit/revenues) and
operating profit margin (operating profit/revenues) for Tesco PLC
(refer to Exhibit 2.13).
Multiple Choice
5.4% and 5.1%
5.4% and 2.3%
Cannot be calculated with the information provided
4.2% and 8.3%
EXHIBIT 2.13 TESCO PLC Excerpt from Group Income Statement 52 weeks ended 25 February 2017 Before exceptional items £m Exceptional items (Note 4) £m Total £m Continuing operations Note Revenue Cost of sales Gross profit (loss)...... Administrative expenses Profits/(losses) arising on property-related items....
1. Calculate gross profit margin (gross profit/revenues) and
operating profit margin (operating profit/revenues) for Tesco PLC
(refer to Exhibit 2.13).
a. 5.4% and 2.3%
b. 5.4% and 5.1%
c. Cannot be calculated with the information provided
d. 4.2% and 8.3%
EXHIBIT 2.13 TESCO PLC Excerpt from Group Income Statement 52 weeks ended 25 February 2017 Before exceptional items £m Exceptional items (Note 4) £m Total £m Continuing operations Note Revenue Cost of sales Gross profit (loss)...... Administrative expenses Profits/(losses) arising...
Calculate the financial worth of Hershey's using the
outstanding shares and method for income statement of 2018.
3:43 Sprint al 77% Search for news or symbols Income Statement All numbers in thousands Breakdown 12/31/2018 Total Revenue 7,791,069 că Š Ň 3 Cost of Revenue 4,215,744 Gross Profit 3,575,325 Operating Expenses Research Development Selling General and Administr... 19 1,874,829 Total Operating Expenses 9 1,874,829 Operating Income or Loss 1,700,496 Interest Expense 146,858 Total Other Income/Expenses N... 0 -151,598 Income Before Tax...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands): Sales revenue Interest revenue Interest expense $26,000 cost of goods sold 260 Selling and administrative expense 460 Restructuring costs $14,500 3,300 1,600 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.4 million and a gain on disposal of the component's assets of $3.6 million. 600,000 shares of common...
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands): Sales revenue Interest revenue Interest expense $30,000 cost of goods sold 340 Selling and administrative expense 540 Restructuring costs $ 16,500 3,700 2,000 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.8 million and a gain on disposal of the component's assets of $4.4 million. 600,000 shares of...
please complete income
statement
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2021 $4,600,000 2,900,000 840,000 400,000 154,000 208,000 64,000 2020 $3,700,000 2,040,000 715,000 342,000 144,000 208,000 On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component...
PROBLEM 3 – Income Statement (20 points) Selected information about income statement accounts for the Chatham Company is presented below (the company's fiscal year ends on December 31): 2021 Sales revenue $ 7,040,000 Cost of goods sold 4,576,000 Administrative expense 1,280,000 Selling expense 576,000 Loss due to inventory write-down 56,000 Interest revenue 240,000 Interest expense 320,000 On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by...
Income Statement and Retained Earnings The Huff Company presents the following partial list of account balances taken from its December 31, 2019 adjusted trial balance: Sales (net) $122,000 Operating expenses $27,300 Interest expense 3,100 Common stock, $5 par 22,000 Cost of goods sold 58,000 Retained earnings, 1/1/2019 42,700 The following information is also available for 2019 and is not reflected in the preceding accounts: 1. The common stock has been outstanding all year. A cash dividend of $1.02 per share...
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31) Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2021 2020 $5,250,000 $4,350,000 3,030,000 2,170,000 970,000 845,000 530,000 472,000 167,000 157,000 234,000 234,000 116,000 On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as...
Selected information about income statement accounts
for the Reed Company is presented below (the
company's fiscal year ends on December 31):
2021 2020
Sales $ 4,400,000 $ 3,500,000
Cost of goods sold 2,860,000 2,000,000
Administrative expenses 800,000 675,000
Selling expenses 360,000 302,000
Interest revenue 150,000 140,000
Interest expense 200,000 200,000
Loss on sale of assets of discontinued component 48,000 —
On July 1, 2021, the company adopted a plan to discontinue a
division that qualifies as a component of
an...