1.What is differential reporting? 2 Does legislation allow differential reporting? Discuss.
3 What are the arguments in favour of differential reporting? Discuss whether or not you
accept these arguments. 4 What is a reporting entity? What factors may be employed to determine whether an entity is a reporting entity? 5 Which of the following are likely to be reporting entities, according to SAC1? Give reasons.
(a) A proprietary company growing vegetables: family shareholders are the employees
and directors and there are no external borrowings.
(b) A proprietary company in light engineering: it has 70 employees, two working
shareholders/directors, a bank overdraft facility of $30 000 and gross annual operating
revenue of $15 million . (c) A public company in the transport industry: it has 250 shareholders, of whom three are working directors, 360 employees, and substantial bank and finance company borrowings.
(d) A proprietary company in the waste and toxic chemical disposal industry: it is
managed by family shareholders; has 120 employees, no external borrowings,
and gross operating revenues of $20 million; and controls $7 million in gross
assets.