EVENTS AFTER THE REPORTING PERIOD + ACCOUNTING POLICY

Question 1

Accounting policies

Answer 1

IAS 8
Rules and procedures used to prepare financial statements.
Must be applied consistently for similar transactions

Question 2

Change in accounting policy only allowed if

Answer 2

Required by new IFRS/IAS
Voluntarily provides more relevant / reliable info

Question 3

Changes in accounting estimates

Answer 3

Arise due to uncertainty in future outcomes
Treatment = prospective adjustment only.

If unclear whether its a policy or estimate - treat as estimate

Question 4

Materiality

Answer 4

Based on size and nature
Judgement based, entity specific

Info is material if its omission/misstatement could influence decisions

Question 5

Events after the reporting period

Answer 5

Reporting date: end of reporting period
Authorisation date: when board approves financials

Events between those dates = events after the reporting period

Question 6

Adjusting events

Answer 6

Provide evidence of conditions existing at reporting date
Must adjust financial statements.

Dividends - declared after reporting date. Not recognised as liability.

Going concern - if going concern fails after reporting date. Must not prepare on going concern basis.

Question 7

Non adjusting events

Answer 7

Reflect new conditions after reporting date
No change to financial figures, but disclose if material

Question 8

Adjusting events disclosure requirements

Answer 8

Adjust numbers in financials or disclose in the notes

Question 9

Non- Adjusting events disclosure requirements (IAS 10)

Answer 9

Disclose nature of the event, estimated financial impact

Question 10

Retrospective vs prospective

Answer 10

Changes in policy = retrospective

Changes in estimates = prospective