Hello,
In Question part d:
d) The figure for development expenditure in the list of account balances represents the amounts deferred in previous years in respect of the development of a new product. Unfortunately, during the current year, the government has introduced legislation which effectively bans this type of product. As a consequence of this the project has been abandoned. The directors of Wingers are of the opinion that writing off the development expenditure, as opposed to its previous deferment, represents a change of accounting policy and therfore wish to treat the write off as a prior period adjustment.
In BPP kit's solution, the development expenditure is taken as a revaluation reserve and eventually added in the retained earnings in the statement of changes and equity? I don't get this, could you please explain this to me?
In Question part d:
d) The figure for development expenditure in the list of account balances represents the amounts deferred in previous years in respect of the development of a new product. Unfortunately, during the current year, the government has introduced legislation which effectively bans this type of product. As a consequence of this the project has been abandoned. The directors of Wingers are of the opinion that writing off the development expenditure, as opposed to its previous deferment, represents a change of accounting policy and therfore wish to treat the write off as a prior period adjustment.
In BPP kit's solution, the development expenditure is taken as a revaluation reserve and eventually added in the retained earnings in the statement of changes and equity? I don't get this, could you please explain this to me?
