Banksia Ltd Is in the Process of Completing Its Financial

question 61

Multiple Choice

Banksia Ltd 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 AASB 110 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:

Crib Signs

Crib signs refer to visual or physical indicators, often in a baby's crib, that can signal various needs or states of well-being of the infant.

Idiosyncratic Signs

Unique or individual symbols, behaviors, or indicators that are characteristic of a particular person.

Overgeneralization

The cognitive bias involving the extension of conclusions or rules to broader contexts than is justified by the evidence, often seen in language acquisition and stereotyping.

Overregularization

A phenomenon in language learning in which children apply regular grammatical patterns to words that are exceptions to the rule.