Chapter 13, Problem 2CCTC

(1)

To determine

Financial Statements: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Financial Disclosures: Financial disclosures refer to all material, significant and relevant information about the reporting organization that are essential to understand the financial statements of the organization entirely. It also helps to evaluate the performance and the financial health of an organization. These disclosures are either provided on the face of the financial statement or as notes to the financial statements as supporting schedules.

GAAP:

Generally Accepted Accounting Principle (GAAP) is a common set of accounting principles, standards, and procedures that the companies must follow at the time of preparation of the financial statements.

IFRS:

International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

• Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
• Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To determine: The reason for increase in total deferred income of €249 as of the end of fiscal 2015. \

(2)

To determine

To explain: the threshold for recognition of provision under IFRS different than it is under U.S. GAAP.

(3)(a)

To determine

Beginning and ending balances of total provisions and retirement benefits shown in Note 32 for fiscal 2015 tie to the balance sheet.

b.

To determine

To prepare: Journal entries for the changes in the litigation provision occurred during the fiscal year 2015.

(4)

To determine

To know: Whether amounts of contingent liability recognized as liability on the A’s balance sheet.