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  • Easy Peasy5

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    Princess Camilla Smith
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    The document discusses the accounting treatment for changes in the value of a financial asset between interim and annual reporting periods. An impairment loss of $500,000 should be recognized in the interim income statement. From the interim period to year-end, an increase in value of $800,000 should be taken to equity. If no interim report was prepared, a gain of $300,000 would have been taken to equity at year-end instead. The frequency of balance sheet preparation affects whether changes in value are recognized in income or equity.

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    The document discusses the accounting treatment for changes in the value of a financial asset between interim and annual reporting periods. An impairment loss of $500,000 should be recognized in the interim income statement. From the interim period to year-end, an increase in value of $800,000 should be taken to equity. If no interim report was prepared, a gain of $300,000 would have been taken to equity at year-end instead. The frequency of balance sheet preparation affects whether changes in value are recognized in income or equity.

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    12 views1 page

    Easy Peasy5

    Uploaded by

    Princess Camilla Smith
    The document discusses the accounting treatment for changes in the value of a financial asset between interim and annual reporting periods. An impairment loss of $500,000 should be recognized in the interim income statement. From the interim period to year-end, an increase in value of $800,000 should be taken to equity. If no interim report was prepared, a gain of $300,000 would have been taken to equity at year-end instead. The frequency of balance sheet preparation affects whether changes in value are recognized in income or equity.

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    © All Rights Reserved
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    statements for the period to December 31,

    20X8?
    The financial asset should be reviewed for impairment at the date of the
    interim financial report, and therefore an impairment loss of
    $500,000 should be recognized in the income statement at that date. The
    increase in value of $800,000 from July 1, 20X8, to December 31, 20X8, should
    be taken to equity. If the entity had not prepared an interim report, then a
    gain of $300,000 would have been taken to equity at December 31, 20X8. It
    is the frequency of the preparation of the balance sheets that affects the annual
    results.

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