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.

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Definitions:

NLRB

Stands for National Labor Relations Board, a US federal agency that enforces US labor law in relation to collective bargaining and unfair labor practices.

Mandatory Bargaining

A legal requirement for employers to negotiate with duly elected employee representatives on work conditions, pay, and other employment terms.

Contract Costing

A method used in accounting to track costs associated with a specific contract, often used in industries like construction where work is project-based.

Mandatory Bargaining Issues

Subjects that must be discussed during collective bargaining negotiations, such as wages, hours, and working conditions.