Intro to Single Entity Accounts

Question 1

IAS 1 requires “other comprehensive income” to be split between two headings?

Answer 1

• items that will NOT be reclassified to P&L
• items that may be reclassified subsequent to profit or loss.

Question 2

What will F1 students mainly deal with in the SOPL “Other Comprehensive Income”

Answer 2

gains or losses arising from revaluation of PPE and these should be shown as items that will not be reclassified to profit or loss.

Question 3

What does the statement of changes in equity provide? SOCIE

Answer 3

summary of all changes in equity.

• This includes the EFFECT of share issues and dividends.
• This statement is useful since the total change in equity reflects the INCREASE or DECREASE in the net assets of the entity in the period and so reflects the change in the wealth of the entity in the period.

Question 4

What does share capital include in SOFP?

Answer 4

ORDINARY/EQUITY SHARES
* own a % of the entities net assets

PREFERENCE SHARES
* own a % of the entities share capital

Question 5

What are inventories valued at?

Answer 5

LOWER of cost and net realised value.

NRV - What you would get for the stock LESS any costs.

Question 6

If stock is damaged and you get less for it and there are repair costs, what do you do?

Answer 6

an adjustment to closing inventory to bring it to the LOWER of cost or NRV