Events After Report Period Flashcards
According to PAS 10 paragraph 3, ______ are those events, whether favourable or unfavorable, that occurs between the end of reporting period and the date on which the financial statements are authorized.
Events after the reporting period
What are the 2 types of events after the reporting period?
Adjusting and non adjusting period
Those that provide evidence of conditions that exist at the end of reporting period.
Adjusting events
Those that are indicative of conditions that arises after the end of reporting period
Non adjusting events
The following are examples of adjusting events excet:
I. Settlement after the reporting period of a court because it confirms that the entity already had a present obligation at the end of the reporting period.
II. The discovery of fraud or errors that show the financial statements were incorrect
III.Business combination after the reporting period
III. (This is a non-adjusting event)
The following are examples of events after the reporting period. Which of the an example of adjusting event?
a. The determination after the reporting period of the cost of asset purchased before the end of reporting period
b. Plan to discontinue an operation
c. Major purchase and disposal of asset or expropriation of major asset by government
A is an adjusting event while B and C are both non-adjusting events
Which of the following is a non adjusting event?
A. Bankruptcy of a customer which occurs after the reporting period
B. Destruction of a major production of plant by a fire after the reporting period
C. The determination after the reporting period of the profit sharing or bonus payment if the entity has the present obligation at the end of reporting period to make such payment.
B
Financial statements are authorized for issue when the _________ reviews the financial statements and authorizes them issue.
Board of directors
