Page 401 - SBR Integrated Workbook STUDENT S18-J19

Answers

Chapter 3

Example 1

Policies, estimates and errors

The change in the depreciation method is not a change in an accounting
policy but a change in an accounting estimate. This is accounted for
prospectively. The revision results in an increase in depreciation for 20X3 of
$6 million and the disclosure of an estimated increase for 20X4 of $8 million.
No amendment is made to the 20X2 financial statements.

The systems error has resulted in a prior period error. In order to correct this,
Zack should restate the prior year comparative figures in the statement of
profit or loss, which will increase the prior year profit figure by $2 million.
Additionally, the prior year comparative figure for trade payables in the
statement of financial position must be reduced by $2 million. Opening
retained earnings in the statement of changes in equity will also require
restatement.

Chapter 4

Example 1

Principal or agent

Deals4U does not control the computer equipment – control belongs to the
supplier. The supplier sets the prices for its goods and is responsible for
fulfilling the orders.

Deals4U is an agent – its performance obligation is to arrange for the supplier
to provide the computer equipment to the customer.

As an agent, Deals4U will recognise revenue based on the commission it is
entitled to.

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