D5-IAS 1 7 10

Question 1

1. statement of cash flows

Answer 1

1. operating activities are the main revenue-producing activities of the entity that are not investing or financing activities, so operating acsh flows include cash received from customers and cash paid to suppliers and employees.
2. investing activities are the acquisition and disposal of long-term assets and other investments that are not considered to be cash equivalents.
3. financing activities are acitivities that alter the equity capital and borrowing structure of the entity.

Question 2

2. events after the reporting date

Answer 2

1. event after the reporting period: an event, which could be favourable or unfavourable, that occurs between the end of the reporting period and the date that the financial statements are authorised for issue.
2. adjusting event: an event after the reporting period that provides further evidence of conditions that existed at the end of the reporting period,including an event that indicates that the going concern assumption in relation to the whole or part of the enterprise is not appropriate.
3. non-adjusting event: an event after the reporting period that is indicative of a condition that arose after the end of the reporting period.

Question 3

3. adjusting events

Answer 3

1. events after the balace sheet date that provide further evidence of conditions that existed at the end of the reporting period, including events that indicath that the going concern assumption in relation to the whole or part of the enterprise is not appropriate.
2. change in judgments, estimate or assumptions after the year end.
   - inventory sold at a loss after the year end.
   - customers have announced their bankruptcies after the year end.
   - changes in underlying assumptions after the year end,ie, going concern.

Question 4

4. non-adjusting events

Answer 4

1. events or conditions that arose after the end of the reporting period.
2. the events happening after the financial statement year end do not give evidence existed as at the financial statements year end.
   - fire destroyed the inventory after the year end;
   - dividends are declared after the year end (simply disclose in the current year1s note, accounting entries applied to the next year`s account)
   - share issues after the year end.

Question 5

5. disclosure

Answer 5

1. non-adjusting events should be disclosed if they are of such importance that non-disclosure would affect the ability of users to make proper evaluations and decision.the required disclosure is the nature of the event and an estimate of its financial effect or a statement that a reasonable estimate of the effect cannot be made.
2. a company should update disclousures that relate to conditions that existed at the end of the reporting period to reflect any new information that it receives after the reporting period about those conditions.
3. companies must disclose the date when the financial statements were authorised for issue and who gave that authorisation. if the enterprise`s owners or others have the power to amend the financial statements after issuance, the enterprise must disclose the fact.