When an Entity Ceases to Prepare Their Accounts in Accordance

question 8

Multiple Choice

When an entity ceases to prepare their accounts in accordance with IAS 29 because the economy is no longer deemed to be hyperinflationary which of the following do they NOT need to disclose;

• A)the fact that the financial statements and the comparative figures have been restated for changes in the general purchasing power of the reporting currency and are stated in units of purchasing power at the balance sheet date.
• B)whether the underlying financial statements are based on historic costs or current costs
• C)the identity and level of the general price index used at the balance sheet date and the movement in this index during the current and previous reporting periods.
• D)a forecast of the economy & an indication of whether it will again be necessary to report under IAS 29 in the next five years

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Definitions:

Net Operating Income

This is the profit a business generates from its operations, excluding non-operating income and expenses, taxes, and interest.

Units

In a manufacturing or production context, units refer to individual items or products.

Variable Expenses

Costs that fluctuate with changes in production volume or business activity levels, such as raw materials and direct labor.

Fixed Expenses

Costs that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.