Exam 12: Disclosure: Legal Requirements and Accounting Polices

What is comparative information and why must it be disclosed in financial statements?

In accordance with the quantitative guidelines in AASB 1031 Materiality,to determine if the omission of an item of Equipment worth $600 000 is material,it should be compared with the more appropriate base amount of:

Prior to the finalisation of the financial statements for the year ended 30 June 20X2,a company experienced a number of material events,including: I on 10 July 20X2,the directors decided to close a division of the company at an estimated cost of $1 000 000. II on 10 August 20X2,a court decision found the company liable to pay damages of $500 000 to a major customer who had commenced legal action in April 20X0. III an independent valuation of Property,conducted on 20 July 20X2 revealed that the directors' valuation included in the 30 June 20X2 financial statements was overstated by $700 000. In respect of the events listed above,it will be necessary to adjust the financial statements,by way of general journal entries,for:

According to the Corporations Act if a company is a borrower,when its annual financial report goes to the members it must be accompanied by:

To meet the stated objective of general purpose financial reporting,a set of financial statements must contain information about an entity's: I II III IV Assets and liabilities Yes Yes Yes Yes Income and expenses Yes Yes Yes No Equity & changes in equity Yes Yes No No Cash flows No Yes No Yes