21 October class - adjustments/income statement

Might be worth visiting this dicsussion forum if you want to get support from other students! http://forums.aat.org.uk/showthread.php?p=167484#post167484

Remember from last session (seems like so long ago now!) - I suggested that much of the international convergence of financial accountin standards was about a standardised approach to terminology rather than fundamental changes to the way in which accounting equation elements are recognised or measured.

Therefore this session is going to be spent concentrating on the application of the fundamental accounting concept - accruals/matching concepts in order to calculate adjustments to an income statement (Statement of Comprehensive Income)

The question that we are going to do is a question from June 2009 on this unit - so the exam practice starts now.

We will revist the Statement of Financial Position next week after I have looked at the homework!

Lecture notes

http://www.scribd.com/doc/21981842

Remember from the last session -extraordinary items are not permitted in the new income statement -why? Because preparers of the accounts could and often did manipulate the profit figure by treating unusual gains as ordinary material items (abov ethe line) and ususual losses (below the line) - making performance look better than it actually was.

A discontinued operation - component of the business that has been disposed of or is held for sale and represents a separate major line of business or geographical area of operations.

This week we are going to do the rest of the questions in section 1 on Statement of Financial Position which as explained is the new balance sheet statement for limited companies who have to produce financial statements under the international accounting standard regulatory framework

It is very important that you understand the issues around compliance and increased burden on companies as well as being able to do the numbers!

Lecture notes
http://www.scribd.com/doc/21981799