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I wanted to know that why dont we treat the factory fire as a transaction and record even after the statements were made?
The amount was significantly material
And also what to do with the insurance money? Any entry for that?
Thank you
You prepare SOFP as of year end (e.g. 31 December) and SOPL for the year (e.g. from 1st January till 31st December).
As of 31 December the factory was OK. Thus statements should represent factory as it is OK.For the next year you will record factory fire and represent this event in financial statements for this subsequent year.
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