In very rare circumstances, an entity may need to produce financial reports which do not comply with a specific accounting standard, if compliance with the standard would be so misleading they do not provide useful information to users, and the financial statements would no longer be fairly presented.
We’ve studied how current tax is the amount of tax payable to the taxation authorities in the current financial period.
When deferred tax is being provided for, a full provision method is used under IAS 12.
The first thing to do in an exam is look at the carrying amount of the asset or liability which is its net book value, in the financial statements.
At the end of the accounting period, there will be a current and non-current liability associated with the company’s lease obligations.
The finance lease obligations will be made up of the capital balance outstanding plus any interest accrued but not yet paid at the end of the reporting period.
The current liability will be:
When we look at the statement of comprehensive income, the costs associated with the leased asset held under a finance lease will be:
A lease is normally classified as a finance lease if any of the following conditions apply:
Let’s take a closer look now at how to calculate the present value of the minimum lease payments.
The asset and liability to be recognised is the lower of the fair value of the leased asset and the present value of minimum lease payments.
Government grants are assistance in the form of a transfer of resources (e.g. cash, assets, or assistance) in return for past or future compliance with conditions relating to an enterprise’s operating activities.
Government refers to government, government agencies and similar bodies whether local, national or international.
The standard does not deal with:
The calculation of basic EPS is a little bit trickier when new shares have been issued during the financial year.