Banksia Plc Is in the Process of Completing Its Financial

question 55

Multiple Choice

Banksia Plc is in the process of completing its financial reports for the period ended 30 June 2014 when it becomes public knowledge that company income tax rates are to be increased and that the increase is to apply retrospectively to the financial year just completed.What treatment is required by IAS 10 for this item?

• A)No disclosure is required because the information is publicly available.
• B)The potential effect on the accounts should be disclosed in the notes to the financial statements.
• C)If material, the financial statements should be adjusted to reflect the impact of the event.
• D)An adjustment to the statement of comprehensive income should be made, but only note disclosure for the statement of financial position since it is prepared as at the reporting date.

---

Definitions:

New Market

Refers to an undiscovered or underexploited segment in the marketplace that a company can target to expand its customer base.

Strategic Alliance

A collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another.

Globally-Based Opportunity

A chance or prospect for business, investment, or collaboration that is available on an international scale.

Mutual Benefit

A situation or agreement where all parties involved gain advantages or profits, often used in contexts of partnerships or cooperative arrangements.