Events after the reporting period

Question 1

When is the cut off date to consider events?

Answer 1

the date when FS authorised for issue to shareholders

Question 2

For which events do you amend the financial statements?

Answer 2

adjusting events

Question 3

What are adjusting events?

Answer 3

events that provide evidence of conditions that existed at year end

Question 4

How do you deal with adjusting events?

Answer 4

• settlement of a court case indicates amount of provision required
• bankruptcy of a customer indicates amount of bad debt allowance/write off required
• sale of asset which indicates FV/NRV at year end
• decision to cease trading so that company is not a going concern

Question 5

Which type of event does not require amendment?

Answer 5

non-adjusting events

Question 6

What are non-adjusting events?

Answer 6

events that provide evidence of conditions that arose after the reporting date

Question 7

What are examples on non-adjusting events?

Answer 7

• destruction of assets
• decline in the market value of PPE after the reporting date

Question 8

What do you do with errors identified before the authorisation date?

Answer 8

adjusted in the financial statements

Question 9

What do you do with errors identified after the authoirsation date?

Answer 9

IAS8 error