XXXXXXXXXXPowertech company limited is a private limited company. Its financial year ended on 31 December each year. The company’s policy is to record capital charge (Bank interest of Project/Capital...

Powertech company limited is a private limited company. Its financial year ended on 31 December each year. The company’s policy is to record capital charge (Bank interest of Project/Capital investment)to Profit and Loss account (Income statement). However, in the year 2020, the company decided to change the policy and considerthe capital charge(Bank interest of Project/Capital investment)with Property, Plant and Equipment. That means Bank interest will be added with Property, Plant and equipment value and charge depreciation on the amount accordingly. The Relevant Profit and Loss account and Balance Sheet (Statement of Financial Position)extracts is given below:Reported202020192018Profit and Loss AccountDepreciation201510Capex charge(Bank Interest)*502030703540Reported202020192018Balance Sheet (Statement of Financial Position)Non-CurrentAssets-Cost150120100Less: Accumulated Depreciation(45)(25)(10)Book Value/ Written Down Value1059590*Policy changes to capitalize in 2020.Let's say Borrowing costs(Bank Interest)earlier recorded in Profit and Loss Account, now to be capitalizedwith Property, Plant and Equipment.Requirement:1.What is the impact in Financial Statements while policy change is adopted?2.Given the information provided above, restate the Profit and Loss Account and Balance Sheet (Statement of Financial Position)