Financial and Corporate Reporting

FINANCIAL AND
CORPORATE REPORTING

Table of Contents
MAIN BODY..................................................................................................................................3
PART A...........................................................................................................................................3
PART B...........................................................................................................................................3
Statement of comprehensive income for the year ended 31st march 2001..................................3
Statement of Financial Position as at 31st march 2001................................................................4
Statement of changes in equity....................................................................................................5
REFERENCES................................................................................................................................1

MAIN BODY
PART A
As per AS-6 “Depreciation” states that all the assets of the company except land and
goodwill must be recorded at the written value after deducting depreciation and from next year
of purchase depreciation is charged on the written down value of the assets. In this case, it is
recommended to Lima to charge depreciation on the written down value of the assets rather than
on the cost value of the assets and also record the assets on written value rather than cost value in
the balance sheet (Baukmann, 2018). As per the International Financial Reporting Framework, it
is recommended to all the industry except software industry to do not capitalize the research and
development cost in the balance sheet. It is recorded as expenses in the profit and loss account.
So it is recommended to Lima, the owner of restaurant company to record the research and
development expense in P&L rather than capitalizing it. As per IAS 16 (Villani, 2019) all the
assets must be revalued by taking into consideration its revaluation from time to time in order to
incorporate changes in value due to depreciation and impairment or damages. Under IAS – 37,
for contingent liabilities and provisions; here there are contingency of occurrence of legal claims
due past event, that is allergic reaction, so for this Lima needs to pay some compensatory amount
which nothing but the arisen of obligatory event, here she needs to provide for amount that she
will be rationally going to pay in order to settle this legal action.
PART B
Statement of comprehensive income for the year ended 31st march 2001
Particulars Amounts($000)
Revenue 1800
Less Cost of sales:
Opening inventory 200
Add Purchases 500
Less Closing inventory -280
Add Apportioned depreciation 22.5 -442.5