QUESTION 4:

What is non-IFRS financial information? Discuss how ASIC's RG230 could be applied to minimise the provision of non-IFRS financial information that could be misleading to investors.

QUESTION 5

During 2020, Point Addis Ltd commenced the construction of a windfarm for its own use. During the reporting period ending 30 June 2023, a change in accounting standards means that the directors are required to change the company's treatment of borrowing costs incurred in the construction of assets for its own use. In previous periods Point Addis Ltd expensed such costs, but must now capitalise them as part of the construction cost in line with the requirement of AASB 123. The unadjusted statement of profit or loss and other comprehensive income and statement of changes in equity for the reporting period ended 30 June 2023 are detailed below.

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Point Addis Ltd

Abridged statement of profit or loss and other comprehensive income for the 2023 2022

Year ended 30 June 2023 ($) ($)

Profit before tax 14 600 14 200

Income tax expense (4 380) (4 260)

Profit for the year 10 220 9 940

Other comprehensive income - -

Total comprehensive income 10 220 9 940

Point Addis Ltd

Abridged statement of changes in equity for the year ended Share capital Retained earnings Total

30 June 2023 ($) ($) ($)

Balance at 1 July 2021 12 500 8 050 20 550

Profit for the year ended 30 June 2022 9 940 9 940

Distributions to shareholders - (2 700) (2 700)

Balance at 30 June 2022 12 500 15 290 27 790

Profit for the year ended 30 June 2023 - 10 220 10 220

Distributions to shareholders - (3 700) (3 700)

Balance at 30 June 2023 12 500 21 810 34 310

Point Addis Ltd

Statement of financial position

(extract) at 30 June 2023 2023 ($) 2022 ($) 2021 ($)

Qualifying asset under construction 10 700 6 650 4 400

Other assets 23 610 21 140 16 150

34 310 27 790 20 550

Share capital 12 500 12 500 12 500

Retained earnings 21 810 15 290 8 050

34 310 27 790 20 550

ADDITIONAL INFORMATION

1. In 2023, interest of $4000 relating to the construction of the windfarm was expensed. Interest costs of $3000 were expensed in 2022, $3900 was expensed in 2021 and $2200 was expensed in reporting periods prior to 2021.

2. No depreciation has been charged on the windfarm as it has not yet been commissioned.

3. The tax rate has remained at 30 per cent for the past three years.

REQUIRED:

Redraft the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position (extract) so as to comply with generally accepted accounting practice and all relevant accounting standards