Events After the Reporting Period

Question 1

Events after the reporting period definition

Answer 1

events, both favourable/unfavourable
- occur between end of reporting period and date when financial stmts are authorised for issue

• impact figures OR opinion shareholders would have

Question 2

What are the two types of events after the reporting period?

Answer 2

• adjusting
• non adjusting

Question 3

Adjusting Events Definition

Answer 3

• provide evidence of conditions which existed at end of reporting period
• found out after report date, was true before hand
• amounts in stmts changed

Question 4

Non-adjusting events definition

Answer 4

events that relate to conditions which arose after the end of the reporting period
- impact next yr stmts not current yrs

• disclosed in a note

Question 5

Examples of adjusting events and perhaps how adjusted

Answer 5

• resolution of court case - contingent asset/liability into receivable/payable
• bankruptcy of major customer- irrecoverable debt
• evidence of NRV of inventory- decrease close inv
• discovery of fraud/errors that show stmts were incorrect

Question 6

What are examples of non-adjusting events and perhaps how they would be dealt with?

Answer 6

Only disclosed in notes

• destruction of major asset- flood/fire
• major share transactions- right/bonus/share issues
• announcement of plan to close part of business

Question 7

How are dividends proposed/ declared after reporting period dealt with?

Answer 7

• are a non adjusting event
• only disclosed in notes, not in figures

Question 8

What happens if an event affects the going concern of a business?

Answer 8

• if a non adjusting event affects going concern then it becomes an adjusting event
• major fire destroys whole factory/machinery