A change in accounting policy at Sostia, applied retrospectively, increases opening inventories by 150,000 and an opening provision by 40,000. Tax bases do not change, at a rate of 28 % (case data). Compute the net tax effect (liability) and the net adjustment to opening equity.
- Increase in inventories
- 150,000
- Increase in the provision
- 40,000
- Tax rate
- 28 %