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Chapter IAS 8.
In BPP study text see page 117, where does this figure $21950 come from????
For the correction of prior year error period why has it take 4200-1260 why not 4200+1260 because income tax should have increase in to 4660 for the year 2007 by 1260.So why is has minus 1260 but not add 1260????
PLEASE REPLY
“As previously reported” is the retained earnings as at 1 January 2006, 13 million plus the unadjusted 2006 profits of 8,950,000 = 21,950,000. The adjustment is therefore + 4,200,000 less tax at 30% ie an adjustment of 4,200,000 – 1,260,000 – a net adjustment of the brought forward figures into 2007 of 2,940,000
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