Introduction

There can be a restatement of comparatives through either a correction of error, change in accounting policy or a reclassification.

 

When you need to restate comparatives, there are two approaches:

  • Modified retrospective approach: Adjustments to the numbers are applied to the current period only, with any impact on the opening balances of equity disclosed in the statement of changes in equity (and optionally, as it is not a note that is required to be on, the retained earnings note). You put all retained earnings adjustments to EQERE (either via the Trial Balance or Adjustments) for the current period and then enter the details of the adjustments in the manual rows (which are between opening balance and restated opening balance) for the current period of the statement of changes in equity (and, optionally, the retained earnings note).
  • Full retrospective approach: Adjustments to the numbers are applied to the comparatives and flow through to the opening balances of the current period (either via the Trial Balance or Adjustments). The details of the adjustments are disclosed in the restatement of comparative note and there is not necessarily a need for a third statement of financial position (a third column is increasingly becoming the exception rather than the norm).

 

 

Transitions

The 'Restatement of comparatives' note can be renamed and used for 'Transition to IFRS', 'Transition to FRS 101', 'Transition to FRS 102' or some other basis of preparation, for example:

The company transitioned from GAAP to FRS 101 on 1 January 2022 and the impact is as follows:

 

 

Population of numbers

The restated numbers should be adjusted in the prior period either through a Trial Balance import or Adjustments.

 

 

Population of descriptions

  • Apart from the subtotal descriptions which are automatically calculated from Report variables, the descriptions are linked to the note names, Chart of Accounts descriptions or edited descriptions in the primary statements, as the software is designed to edit in 'one place' to maintain consistency throughout the report
  • Descriptions should be edited in the originating place
  • If certain rows used in this note do not appear in the primary statements, use an unused note or description

 

 

Full statement, extract or do not print

To view and set restatement disclosure options:

  • Click Reports > Options > Setup
  • Select either No, Yes - Extract only or Yes - Full for each of the Restatement of comparatives - Statement of profit or loss and other comprehensive income, Statement of financial position at the beginning of the earliest comparative period and Statement of financial position at the end of the earliest comparative period options

 

If the selection is Yes - extract only (which is recommended), the table will only print the rows with an adjustment and the mandatory subtotals and totals.

 

 

Statement of profit or loss and other comprehensive income

  • The 'Restated' numbers will populate on the face of the statement of profit or loss and other comprehensive income and link through to this note
  • Manually input the original 'Reported' numbers and the 'Adjustment' numbers will be automatically calculated upon saving the table

 

 

Statement of financial position at the beginning of the earliest comparative period

  • Only populate this table if the restatement affects the beginning of the comparative period
  • Manually input both the 'Reported' number and 'Restated' numbers, as this third set of numbers is not in the Trial Balance or Adjustments
  • The 'Adjustment' numbers will be automatically calculated upon saving the table. This produces a third column on the face of the statement of financial position, and this is linked from the 'Restated' numbers

 

IAS 34 'Interim Financial Reporting' has a year-to-date approach and does not replicate the requirements of IAS 1 in terms of comparative information. Therefore, for interim reports, it is not necessary to disclose a 'Statement of financial position at the beginning of the earliest comparative period'.

 

 

Statement of financial position at the end of the earliest comparative period

  • The 'Restated' numbers will populate on the face of the statement of financial position and link through to this note
  • Manually input the original 'Reported' numbers and the 'Adjustment' numbers will be automatically calculated upon saving the table

 

 

Statement of cash flows
  • The 'Restated' numbers will populate on the face of the statement of cash flows and link through to this note
  • Manually input the original 'Reported' numbers and the 'Adjustment' numbers will be automatically calculated upon saving the table

 

 

Notes

Where there is a 'Statement of financial position at the beginning of the earliest comparative period', the 'Notes' should be used to disclose the three statement of financial positions together where numbers have been restated.

 

 

Change number of decimal places

To change the number of decimal places for Earnings per share:

  • Click Reports > Options > Rounding
  • Set Statement of profit or loss - Earnings per share to between 0 and 5 decimal places
  • It is also possible to click the settings icons to the right of the table