Chapter 14

Chapter 14 - Solutions to Gripping IFRS : Graded Questions...

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Solutions to Gripping IFRS : Graded Questions Statement of financial position disclosure : Assets Chapter 14: Page 1 Solution 14.1 MISTY RIDGE LIMITED STATEMENT OF FINANCIAL POSITION AT 30 APRIL 20X5 ASSETS Notes C Non-current assets Property, plant and equipment 5 813 000 Patents and trademarks 6 45 000 1 175 700 Current assets Inventory 7 575 700 Accounts receivable (472 700 -9 200) 8 463 500 721 500 Current liabilities Accounts payable 259 080 Shareholders for dividends 8 000 Provision for taxation 27 520 Bank overdraft 9 18 400 313 000 MISTY RIDGE LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policies The principal accounting policies adopted in the preparation of the financial statement are as follows: Statement of compliance These financial statements have been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance,1984, provisions of and directives issued under the Companies Ordinance, 1984. In case the requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. Accounting convention The financial statements have been prepared on the historical cost basis. These policies are consistent in all material respects with these applied in the previous years. Property, plant and equipment These are stated at cost less accumulated depreciation and impairment losses except for land an building which are stated at cost. Depreciation is charged @ 10% of the cost on straight line basis over its useful life. Intangible Intangible assets include patents and trademarks which are non monetary assets with out physical substance. These are recognized at cost, which comprises its purchase price and directly attributable expenditures.
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Solutions to Gripping IFRS : Graded Questions Statement of financial position disclosure : Assets Chapter 14: Page 2 After initial recognition an intangible asset is carried at its cost less accumulate depreciation and any impairment losses. Amortization is charged against income over the finite useful life of 10 years. Inventory These are valued at lower of cost and NRV. Cost is determined using the following basis Raw material - FIFO WIP and FG - Actual cost including appropriate overheads Accounts Receivable These are carried at cost less any provision for impairment. Accounts Payable These are carried at cost which is there fair value of the consideration to be paid
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Solutions to Gripping IFRS : Graded Questions Statement of financial position disclosure : Assets Chapter 14: Page 3 Solution 14.1 continued . . .
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Chapter 14 - Solutions to Gripping IFRS : Graded Questions...

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