Dear Mike,
Your comments please
Scenario
An entity did not capitalise finance cost for an underlying asset in line with IAS23. But The amount not captilised is immaterial to both SOFP and SOCI.
My answer
Even though the amount is quantitatively immaterial. Not capitalising finance cost is a breach of IAS 23 and is therefore material. As a result the audit opinion will be modified with an except for opinion due to a breach (not pervasive) of an accounting standard.
My sincere thanks as always
Robert
Ask the Tutor ACCA AAA
Maternity and audit report
10y ago#1Not really! IAS only applies to matters that are maternal (your words, not mine!)
If the borrowing costs not capitalised is immaterial to both the statement of profit or loss and the statement of financial position, then it's immaterial.
Is there not a word in the "standard" audit report saying that the work of the auditor is to try to establish that the financial statements are free of material misstatements?
No, no affect of the audit report, sorry
thank you so much. it is now quite clear
10y ago#3You're welcome
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