The Accountant in Preparation for the Financial Statement for the Year

question 77

Multiple Choice

The accountant in preparation for the financial statement for the year 2013 realised an error in the determination of recoverable amounts in last year's financial statements.This error had it been detected in 2012 would have required the recognition of impairment losses amounting to $500 000.To comply with AASB 108 Accounting Policies,Changes in Accounting Estimates and Errors,the accountant should:

• A) make a prospective change to the 2013 figures, on the basis that he has made an error in 2012.
• B) make a prospective change to the 2013 figures, on the basis that he is making a change to an estimate in 2012.
• C) make a retrospective change to the 2013 figures, on the basis that that this is a change in accounting estimates.
• D) make a retrospective change to the 2013 figures, on the basis that he has made an error in 2012.

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Definitions:

Consumer Base

Refers to the group of potential or actual buyers of a product or service.

Structural Risks

Associated with the possibility of loss due to the physical structure or fundamental nature of a business or industry, affecting its stability and profitability.

Skill Set

The range of skills or competencies that an individual possesses, which are relevant to, or necessary for, a particular role or profession.

Operational Risks

The risks of loss resulting from inadequate or failed internal processes, people and systems, or from external events impacting the operation of a business.