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GAMMA CO Extract from the Income Statement under the
Benchmark Treatment | | 20-02
RM | 20-01
RM | | | (restated) | Profit from ordinary activities before interest and income taxes | 30,000 | 18,000 | Interest expense | (3,000) | (2,600) | Profit from ordinary activities before income taxes | -----------
27,000 | -----------
15,400 | Income taxes | (8,100) | (4,620) |
Net Profit | -----------
18,900
===== | -----------
10,780
===== |
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GAMMA CO Statement of Retained Earnings under the
Benchmark Treatment
| 20-02
RM | 20-01
RM | | | (restated) | Opening retained earnings as previously reported | 32,600 | 20,000 | Change in accounting policy with respect to the capitalisation of interest (Net of income taxes of RM2,340 for 20-02 and RM 1,560 for 20-01) Note 1 | ============ (5,460) | ============(3,640) | Opening retained earnings as restated | -----------
27,140 | -----------
16,360 | Net profit | 18,900 | 10,780 |
Closing Retained Earnings | -----------
46,040
===== | -----------
27,140
===== |
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Extracts from Notes to the Financial Statements During 20-02, Gamma changed its accounting policy with respect to the treatment of borrowing costs related to a hydro-electric power station which is in course of construction for use by Gamma. In order to conform with the benchmark treatment on Borrowing Costs, the enterprise now expenses rather than capitalises such costs. This change in accounting policy has been accounted for retrospectively. The comparative statements for 20-01 have been restated to conform to the changed policy. The effect of the change is an increase in interest expense of RM3,000 (20-02) and RM2,600 (20-01). Opening retained earnings for 20-01 have been reduced by RM5,200 which is the amount of the adjustment relating to periods prior to 20-01.
GAMMA CO
Extract from the Income Statement under the
Allowed Alternative Treatment
|
|
| Pro Forma |
| 20-02
RM | 20-01
RM | 20-02
RM | 20-01
RM |
|
|
| (restated) | (restated) | Profit from ordinary activities before interest and income taxes | 30,000 | 18,000 | 30,000 | 18,000 | Interest expense | (3,000) | - | (3,000) | (2,600) | Cumulative effect of change in accounting policy | (7,800) | - | - | - | Profit from ordinary activities before income taxes | -----------
19,200 | -----------
18,000 | -----------
27,000 | -----------
15,400 | Income taxes (includes the effect of a change in accounting policy) | =================
(5,760) | =================
(5,400) | =================
(8,100) | =================
(4,620 ) |
Net Profit | -----------
13,440
===== | -----------
12,600
===== | -----------
8,900
===== | -----------
10,780
===== |
|
GAMMA CO Statement of Retained Earnings under the
Allowed Alternative Treatment
|
|
| Pro Forma |
| 20-02
RM | 20-01
RM | 20-02
RM | 20-01
RM |
|
|
| (restated) | (restated) | Opening retained earnings as previously reported | 32,600 | 20,000 | 32,600 | 20,000 | Change in accounting policy with respect to the capitalisation of interest (Net of income taxes of RM2,340 for 20-02 and RM1,560 for 20-01) Note 1 | =================
- | =================
- | =================
(5,460) | =================
(3,640) | Opening retained earnings as restated | -----------
32,600 | -----------
20,000 | -----------
27,140 | -----------
16,360 | Net profit | 13,440 | 12,600 | 18,900 | 10,780 |
Closing Retained Earnings
| -----------
46,040
===== | -----------
32,600
===== | -----------
46,040
===== | -----------
27,140
===== |
|
Extracts from Notes to the Financial Statements An adjustment of RM7,800 has been made in the income statement for 20-02 representing the effect of a change in accounting policy with respect to the treatment of borrowing costs related to a hydro-electric power station which is in course of construction for use by Gamma. In order to conform with the benchmark treatment on Borrowing Costs, the enterprise now expenses rather than capitalises such costs. This change in accounting policy has been accounted for retrospectively. Restated pro forma information, which assumes that the new policy had always been in use, is presented. Opening retained earnings in the pro forma information for 20-01 have been reduced by RM5,200 which is the amount of the adjustment relating to periods prior to 20-01.
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