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Since it is a chain restaurant, can i assume that the size, capacity and cost of each restaurant should be of a small difference?
Q1. Can I put the asset under the heading inventories instead of having a separate category of “Asset under construction”?
Q1. Since it is a WIP, i can include 80% of the cost under the category inventories under current asset in financial position?
Since it is an error, i should adjust the useful life to 30 years starting from year 1 to adjust retrospectively?
Q3. Can i say that as long as the non compliance is not material, it will have little imapct on the financial statements?
Q2. How does business plan report establish the potential liability of a company to third parties and help to determine the need and extent of any liability disclaimer that may be necessary? Is this clearer?
Q2. Is it possible that not all the assets and liabilities are recognisied in the finanical statements? So far i only know that internally generated goodwill are not recognisied in the finanical statements? Is it clearer this way?
To avoid confusion this is your reply.
1) depends upon how the 2m has been treated. Is it recorded as a loan to a director? That’s ok (private company it’s ok) or has it been recorded as a benefit upon which tax has been calculated – that’s also ok.
If it’s simply Credit Cash, Debit …… ????? Hmmmm, where’s the Debit?
You know, it’s not so easy as a simple “One day I took $2m for my own use” Where’s the Debit?
2) Of course different companies can have different accounting policies! One treats government grants as a deferred credit and another deducts the grant from the related asset
3) Not only wrongly classified (administrative rather than as cost of sales) but also classifies as operating instead of being capitalised (borrowing costs, development expenditure)
4) not sure what you mean by the question. Work on the principle that “an item is material if its inclusion or omission would likely affect the view of the financial statements in the mind of an informed reader”
Ok?
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My question 4: I know that total assets have a materiality guideline of 1%-2%, so how about goodwill and inventory? Is it clearer this way?