Question
The following are various types of accounting changes: For each change or error, indicate how it would be accounted for assuming the company follows IFRS.
The following are various types of accounting changes:
For each change or error, indicate how it would be accounted for assuming the company follows IFRS.
Accounting Treatment1.Change in a plant asset's residual value
select an Accounting Treatment
2.Change due to an overstatement of inventory (in the preceding period)
select an Accounting Treatment
3.Change from sum-of-the-years'-digits to straight-line method of depreciation because of a change in the pattern of benefits received
select an Accounting Treatment
4.Change in a primary source of GAAP
select an Accounting Treatment
5.Decision by management to capitalize interest. The company is reporting a self-constructed asset for the first time.
select an Accounting Treatment
6.Change in the rate used to calculate warranty costs
select an Accounting Treatment
7.Change from an unacceptable accounting policy to an acceptable accounting policy
select an Accounting Treatment
8.Change in a patent's amortization period
select an Accounting Treatment
9.Change from the zero-profit method to the percentage-of-completion method on construction contracts. This change was a result of experience with the project and improved ability to estimate the costs to completion and therefore the percentage complete.
select an Accounting Treatment
10.Recognition of additional income tax owing from three years ago as a result of improper calculations by the accountant, who was not familiar with income tax legislation and income tax returns
select an Accounting Treatment
The following are various types of accounting changes:
Identify the type of change for each of the situations.
Type of change1.Change in a plant asset's residual value
select a type of change
2.Change due to an overstatement of inventory (in the preceding period)
select a type of change
3.Change from sum-of-the-years'-digits to straight-line method of depreciation because of a change in the pattern of benefits received
select a type of change
4.Change in a primary source of GAAP
select a type of change
5.Decision by management to capitalize interest. The company is reporting a self-constructed asset for the first time.
select a type of change
6.Change in the rate used to calculate warranty costs
select a type of change
7.Change from an unacceptable accounting policy to an acceptable accounting policy
select a type of change
8.Change in a patent's amortization period
select a type of change
9.Change from the zero-profit method to the percentage-of-completion method on construction contracts. This change was a result of experience with the project and improved ability to estimate the costs to completion and therefore the percentage complete.
select a type of change
10.Recognition of additional income tax owing from three years ago as a result of improper calculations by the accountant, who was not familiar with income tax legislation and income tax returns
select a type of change
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