- 6 Marks
CR – Nov 2018 – L3 – Q5c – Regulatory framework and ethics
Evaluate the finance director's suggestion to early adopt a revised accounting standard for Navrongo Ltd’s 2018 financial statements.
Question
You are the financial controller of Navrongo Ltd (Navrongo), a company that experienced a relatively difficult trading during the year ended 30 September 2018. Reporting deadlines for the 2018 financial statements are rapidly approaching, and you have a number of matters to finalize. The finance director made the following suggestion in an email:
“A revised accounting standard that is relevant to Navrongo is expected to be issued by the IASB during the 2019 calendar year. Based on the content of the corresponding exposure draft, the revisions to the accounting standard would be beneficial to Navrongo in the year of adoption. The 2018 Navrongo financial statements should be prepared using the proposed new accounting standard on the basis of voluntary early adoption of the new standard.”
Required:
Explain to the finance director, justifying whether you agree or disagree with the suggestion above
Find Related Questions by Tags, levels, etc.
- Tags: Accounting Standards, Early Adoption, Exposure Draft, Financial Reporting, IASB
- Level: Level 3
- Topic: Regulatory Framework and Ethics
- Series: NOV 2018