During the year, the company identified errors and omissions in the accounts of previous years, relating to unrecorded income and incorrect dividend accounting. It was not practicable to determine the period-specific effects of these errors on prior periods. Accordingly, all adjustments have been recognised in the current year’s profit and loss account.
This treatment has been adopted for administrative convenience and in consideration of the company’s imminent dissolution. The impact of these adjustments on the current year’s profit and loss is as follows:
Additional income recognised: £15,116
Dividends adjusted: £38,406
Loss on disposal of fixed assets: £947
Deferred tax movement: £237
Had the adjustments been made in the periods to which they relate, the results for those periods would have been different. The directors consider that this approach gives a true and fair view in the context of the company’s forthcoming strike-off and the fact that there is only one shareholder, who is aware of and has approved this approach.