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AftertheABCCompanyissueditspreviousyearsfinancialstatements,itnoticedthatitincorrectlycalculateddepreciationexpenseand,thus,disclosedthisfactasapriorperiodadjustmentinitscurrentyearsfinancialstatements. (Thisdifferencealsodidnotaffectanycashbalances,sinceJuliemaintainedanoperatinglossforbothperiods.)However,ABCdidnotissuecomparativefinancialstatementsinthecurrentyear.ABCnowwondershowtodisclosethispriorperiodadjustmentinitscurrentyearsStatementofCashFlows.Pleaseprepareatwopagememotofile(FICA).Citecodifications(ASC250-10-50-9and230-10-50-3),atleastonejournalarticle/publicationonthetopicandoneothersource(lookforBigFouraccountingpublicationsforguidance). AlexCorporationisplanningthisyeartopresentcomparativeincomestatementsbutonlythecurrentyearsbalancesheet.JamesJohnston,presidentofAlexCorporationrequestsyouradviceastowhethercomparativecashflowstatementsforboththecurrentandpriorperiodsarenecessaryconsideringonlythecurrentyearsbalancesheetispresented. ArethereanyauthoritativepronouncementsthataddressthisissuethatyoucouldpresenttoMr.Johnston?Pleaseprepareaclientletter(nomorethan2pageslong).Citecodifications(ASC230-10-15-3),atleastonejournalarticle/publicationonthetopicandoneothersourcelookforBigFouraccountingpublicationsforguidance.
- AftertheABCCompanyissueditspreviousyearsfinancialstatements,itnoticedthatitincorrectlycalculateddepreciationexpenseand,thus,disclosedthisfactasapriorperiodadjustmentinitscurrentyearsfinancialstatements.
- (Thisdifferencealsodidnotaffectanycashbalances,sinceJuliemaintainedanoperatinglossforbothperiods.)However,ABCdidnotissuecomparativefinancialstatementsinthecurrentyear.ABCnowwondershowtodisclosethispriorperiodadjustmentinitscurrentyearsStatementofCashFlows.Pleaseprepareatwopagememotofile(FICA).Citecodifications(ASC250-10-50-9and230-10-50-3),atleastonejournalarticle/publicationonthetopicandoneothersource(lookforBigFouraccountingpublicationsforguidance).
- AlexCorporationisplanningthisyeartopresentcomparativeincomestatementsbutonlythecurrentyearsbalancesheet.JamesJohnston,presidentofAlexCorporationrequestsyouradviceastowhethercomparativecashflowstatementsforboththecurrentandpriorperiodsarenecessaryconsideringonlythecurrentyearsbalancesheetispresented.
- ArethereanyauthoritativepronouncementsthataddressthisissuethatyoucouldpresenttoMr.Johnston?Pleaseprepareaclientletter(nomorethan2pageslong).Citecodifications(ASC230-10-15-3),atleastonejournalarticle/publicationonthetopicandoneothersourcelookforBigFouraccountingpublicationsforguidance.
- (Thisdifferencealsodidnotaffectanycashbalances,sinceJuliemaintainedanoperatinglossforbothperiods.)However,ABCdidnotissuecomparativefinancialstatementsinthecurrentyear.ABCnowwondershowtodisclosethispriorperiodadjustmentinitscurrentyearsStatementofCashFlows.Pleaseprepareatwopagememotofile(FICA).Citecodifications(ASC250-10-50-9and230-10-50-3),atleastonejournalarticle/publicationonthetopicandoneothersource(lookforBigFouraccountingpublicationsforguidance).
- ArethereanyauthoritativepronouncementsthataddressthisissuethatyoucouldpresenttoMr.Johnston?Pleaseprepareaclientletter(nomorethan2pageslong).Citecodifications(ASC230-10-15-3),atleastonejournalarticle/publicationonthetopicandoneothersourcelookforBigFouraccountingpublicationsforguidance.
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