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Chapter 11 financial instruments

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 11 financial instruments

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  • April 30, 2023 at 2:09 pm #683758
    AliSher123
    Participant
    • Topics: 24
    • Replies: 13
    • ☆

    Exam preparation question 1
    Retained earnings
    Answers at back
    1250 draft
    200 issue costs
    (266) eff int
    1184 retained earnings balance at 31 dec 20X8
    Question : why are issue costs added ?

    May 2, 2023 at 9:15 pm #683857
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7207
    • ☆☆☆☆☆

    Hi,

    The issue costs have been treated incorrectly, where they have expensed them through profit or loss, thus reducing the profit for the year. To correct the error we need to remove the expense created and therefore add it back.

    Thanks

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