Events after reporting Period Flashcards
1
Q
When should the FS be adjusted due to an event after reporting period
A
If the event is a condition that existed in the period prior to the FS closing.
Eg. We lose a case and the amount of loss is higher
Then contingent liability can be adjusted
2
Q
What to do if the condition didn’t exist at the BS date
A
- Disclosure when it has a significant effect on Assets, liabilities, or operations
3
Q
What is the only exception to the case, if the condition didn’t exist at year-end
A
If mgmt decides to cease operations or liquidate after the year-end - Needs to be reported under the liquidity method
