Discuss the importance of restating financial statements due to prior period adjustments?
Discuss the importance of restating financial statements due to prior period adjustments?
Homework Answers
Prior Period adjustments are a result of prior period error or omissions. Now as a result of these prior period errors and omissions the financial statements items to which those errors and omissions are related are required to be RESTATED. The reason for this Restatement is because IAS 8 requires these errors or omissions to be corrected retrospectively and not prospectively. Retrospective adjustments menas that the corporation shall make adjustments in the OPENING BALANCE of each affected component of equity for the earliest prior period presented and other comparative amounts disclosed for each prior Period. This shall mean that the corporation now have to make another Restated Balance sheet along with the comparatives for all the prior period for which the error or omissions relates to.
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Discuss the importance of restating financial
statements due to prior period adjustments?
List the 3 financial statements used in financial accounting. Discuss the importance of these financial statements....
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The correction of an error in the financial statements of a prior period should be reported, net of applicable income ta...
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Prior period adjustments_ O A. can be ignored because the financial statements have already beeon issued...
Prior period adjustments_ O A. can be ignored because the financial statements have already beeon issued O B. must be recorded in the period in which the error oocurred OC. are shown on the statement of retained oamings as omedons to the beginning balance O D. always Increase the beginning balance of retained eamings Click to select your answer 28 MacBo 2 3 tab
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Pick one of the following adjustments, and tell which financial statement or statements will be effected...
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Prior period adjustments_ O A. can be ignored because the financial statements have already beeon issued O B. must be recorded in the period in which the error oocurred OC. are shown on the statement of retained oamings as omedons to the beginning balance O D. always Increase the beginning balance of retained eamings Click to select your answer 28 MacBo 2 3 tab
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