PartA (6 marks)Analyze each case and choose a letter code under each category (type & approach) to indicate the preferable accounting for each case (items b to f). AssumeIFRS.

Type

Approach

P= Policy

RWR = Retrospective with restatement

E= Estimate

PNR = Prospective with no restatement

AE = Accounting error

a.Changed the plantasset'sresidual value. _____E, PNR______[Example]

b.Discovered that a $400,000 acquisition ofmachinery two yearsago hadbeendebited to the land account.____________

c.Wroteoff development cost accumulatedand capitalized in two previous yearsdue to seriousdoubts about the project'sviability.____________

d.Changed from anunacceptableaccountingpolicy to anacceptableaccountingpolicy.____________

e.Switched from FIFO to average cost to conform to parent company preferences.Opening balances for the current and previous two years can be reconstructed.____________

f.Incorrectly applied a 20% declining balance rate to equipment acquired three years previously when management had instructed that a 15% rate be used.____________

g.Changedtherate used to calculate warrantycosts .________________