Case Study: Equity Accounting, Finance, SPSS Essay

McEquity Corporation
EQUITY CASE

As a new staff accountant joining McEquity Corporation, an Irish company using IFRS, you have been asked by the senior accountant of financial reporting to assemble the statement of changes in equity for 2012that will be used in the annual report.
After getting various amounts and figures from the prior year financial statements, general ledger and subsidiary ledger, you are able to ascertain the following:
Ending balances as of December 31, 2011, were as follows:
Share capital

$25,000,000

Retained earnings

10,000,000

Translation of foreign operations

(2,000,000)

Available-for-sale financial assets

(5,000,000)

Revaluation surplus

4,000,000

Treasury stock

(1,000,000)

Minority interests

1,000,000

Total equity

$32,000,000

The summarized transactions for 2012 are as follows:
Sold capital shares

$2,000,000

Net income

$6,000,000

Minority interest portion

$500,000

Net foreign currency translation losses, net of taxes

$(1,000,000)

Decrease in value of available-for-sale financial assets, net of taxes

$(1,000,000)

Net decrease in revaluation surplus, net of taxes

$(1,000,000)

Purchase of treasury shares

$500,000

Dividends

$1,000,000

REQUIRED:
Based on the above information,
1 Prepare a statement of changes in equity for 2012 using IFRS.
2 Provide a two-page essay on:
1 Presentation differences that there might be in the statement of stockholders’ equity if McEquityCorporation reported using U.S. GAAP.
There are terminology differences as the IFRS uses the term “share capital”, while GAAP uses common stock, minority interests are the same as noncontrolling interests and shareholders are the same as stockholders. The IFRS does give a specific format for preparing the “statement of changes in equity”, but under GAAP, public companies need to apply regulation s-x when preparing “Changes in stockholders' equity and noncontrolling interests”
The IFRS requires a comprehensive income statement of changes in equity that is presented separately from the stat...