Events after the reporting period

Question 1

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

The settlement of a court case that confirms that the entity had a present obligation at the reporting date.

Answer 1

Adjusting.

Question 2

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

The receipt of information indicating that an asset was impaired at the reporting date, or the amount of a previously recognised impairment needs to be adjusted. (i.e. bankruptcy of a customer confirming the loss in trade receivables, or the sale of inventories that gives evidence about the NRV at the reporting date.)

Answer 2

Adjusting.

Question 3

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

Subsequent determination of the purchase price or of the proceeds of sale of assets purchased or sold before the year-end.

Answer 3

Adjusting.

Question 3

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

Determination of the amount of profit sharing or bonus payment, if the entity had a present legal or constructive obligation at the statement of financial position date to make such payments as a result of payments before that date.

Answer 3

Adjusting.

Question 4

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

The discovery of errors or frauds which show that the financial statements were incorrect.

Answer 4

Adjusting.

Question 5

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

Issue of shares or debentures

Answer 5

Non-adjusting.

Question 6

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

Purchases and sales of non-current assets and investments

Answer 6

Non-adjusting.

Question 7

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

Losses of non-current assets or inventories as a result of a catastrophe, such as a fire or flood.

Answer 7

Non-adjusting.

Question 8

Is the following an adjusting event, or a non-adjusting event, if it is occurs between the end of the reporting period and the date that the financial statements are authorised for issue:

Declines in the value of property and investments held as non-current assets, if it can be demonstrated that the decline occurred after year end.

Answer 8

Non-adjusting.

Question 9

If an entity declares dividends after the reporting date, can the entity recognise those dividends as a liability at the reporting date?

Answer 9

No

Question 10

Can the financial statements be prepared on a going concern basis if management determines after the statement of financial position date that it intends to liquidate or cease trading?

Answer 10

No

Question 11

Should the notes of a financial statement disclose the date the financial statements were authorised for issue and who gave the authorisation?

Answer 11

Yes