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Does it have something to do with the election of not applying the requirements by IFRS 16?
Sir, Do the partial reversal (as a credit to the statement of profit or loss) of the accumulated
depreciation on an item of plant even creates a provision?We reclassify a certain portion of this provision each year by multiplying the interest rate and PV of costs. Shouldn’t this increase in provision be classified as current liability and the remaining amount as non-current liability?
It is a test your understanding question from Kaplan’s Financial Reporting study book.
The answer says “The fire is a non-adjusting event because it does not change any of the figures in the accounts at the year end. If material, which is likely, it should be disclosed in the notes to the financial statements.”
I thought it was adjusting event because it might affect going concern as all inventory had been destroyed by fire.
Thank you sir. One thing I did not fully comprehend is why in this question settlement discount is extracted from payables? After all, payables is credited when created and debited when paid with whole amount without taking into account the settlement discount.
Question from BPP 15.15:
The balance on Jude Co’s trade payables account is $31554. The accountant at Jude Co has discovered that she has not recorded:
• A settlement discount of $53 received from a supplier; and
• A supplier’s invoice for $622. What amount should be reported for payables on Jude Co’s statement of financial position?So, in this question I added $622 to $31554, but did not use $53.