Financials 2019 Integrated Annual Report 2019

30 AVBOB MUTUAL ASSURANCE SOCIETY AND ITS SUBSIDIARIES NOTES TO THE SUMMARISED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 (continued) 19. RESTATEMENT - CLASSIFICATION BETWEEN CONSOLIDATED COST OF GOODS AND SERVICES AND CONTRACT BENEFITS AND CLAIMS 2018 2018 Previous Adjustment Restated Statement of comprehensive income R 000 R 000 R 000 Cost of goods and services 450 571 (123 019) 327 552 Gross profit 62 839 123 019 185 858 5 141 709 123 019 5 264 728 Contract benefits and claims 1 222 692 123 019 1 345 711 Profit before transfer to policyholder liabilities 2 172 283 2 172 283 GROUP Free funeral benefits provided to the members of the Society were previously disclosed as a cost of goods and services on the consolidated accounts. Considering the nature of these funeral benefits, it is deemed to be more accurate to disclose these member benefits as part of the contract benefits and claims expense. The reclassification adjustment had an impact on cost of goods and services, gross profit, net income and contract benefits and claims. The reclassification adjustment had no impact on net profit before transfer to policyholder liabilities or income tax or the statement of Net income 111