Chapter 12, Problem 12.4IFRS

(a)

To determine

International Financial Reporting Standards:

They are commonly known as IFRS. It is a set of accounting standards which are developed by independent (Non-profit) organization called as International Accounting Standards Board (IASB). It is universally accepted set of standards which states the rules and practice for accounting practice.

Generally Accepted Accounting Principles:

They are commonly known as GAAP. It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).

To state: the section (operating, investing, or financing) in which the interest paid is reported by Z Plc.

(b)

To determine

To explain: the reason why cash and cash equivalent in statement of cash flow of Z Plc has negative balance.

(c)

To determine

To explain: the treatment of bank overdraft if Z plc reports under GAAP rather than IFRS.

(d)

To determine

To state: the components of ‘Net movement’ in the statement of cash flow which is being reported as negative ‘Net movement in working capital’.