Dear Rajiv,
Thank you very much for your kind help. It has helped me a lot; with your tip I have resolved the issue and also my understanding, now working with deferred taxes which is again a complex item. I have marked the difference between tax and book but struggling with reconciliation due to various tax rates and temporaty and permanent treatment.
Thanks once again, if i need any futher help I may bother you, hope you will bestow me with your kind support in furture also.
Regards
Saeed Yahya
rajiv goyal <goyalcaald@yahoo.
saeedyahya <saeedyahya@yahoo.com> wrote:I am working on the conversion of gaap financial statements to ifrs,
all necessary items of ias has been taken care off. please help me
to understand the logic of assest and owners equity.
Example : Gaap Values ifrs
Vehicle 15,000 15,000
Depricaiton -8,000 -3,000
Net book value 7,000 12,000
owner equity : 100,000
please note the following entry.
Difference in Deperication 5000dr
to owners equity 5000cr.
Gaap already have depricaiton of -8000 if i add 5000 deprciaiton will
reverse to -3000 which is the desired value.
The problem is with owners equity it will reduce by 5,000/- with
credit entry.
Can anybody help me explaining me why such effect on owners equity,
how best it can reflect correct value. I am mid of the work and
stuck up with this concept. Thanks and best regards.Dear,You have a misconcept that owner's equity will reduce by 5000/- with the credit entry. In fact equity will go up by 5000/- with the credit entry as equity always have a credit balance. Under IFRS book value of vehicle is up by 5000/- hence equity will also go up by 5000/-Rajiv Goyal
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