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if disclosures of events occuring after the reporting perid is required by this standart the following information should be provided : a)the natuer of an event b)an estimate of the financial effect, or a statement that such an estimate cannot be made
John what does it meean???
Dear sir,
Fall in value of an investement between the reporting date and the date the financial statements are finalised.
Why is this non adjusting ?
Declaration of equity dividends,
Decline in market value of investements
The announcements of changes in tax rate
The announcement of a major restructiringJohn, why are these non adjusting events?
Tutor,
what is the link beetween going concern assumption and inventory deteriorate?A factory with a value of 3000000 was seriosly damaged by a fire in July 2004. The factory was back in production by August 2004 but its value was reduced to 2000000
Is it adjusting or non adjusting?
Q1 If it is a material non-adjusting event, then we do not change the statements but we have to attach a note explaining (disclosing) what has happened and the amount involved.
Q2 The statements should show the true position at the date of the statements
Q3 If the four items you listed occurred after the reporting date, then they do not affect the position as at the date of the statements. We will not change the statements (but, if they are material, we will attach a note about them).
Q4 If a business was not a going concern (i.e. was about to close down) then it would be likely that inventory would be sold off cheap. We normally assume that a business is a going concern and therefore inventory will not be sold off cheap and therefore usually we will value it at cost (it has to be the lower of cost and net realisable value).
Q5 It depends on what the reporting date was. Assuming that the statements were for a date earlier than July 2004, then it would be non-adjusting (because the factory existed at the date of the statements). However we would disclose what happened in a note to the accounts.
q3. from where we know that it occured after the reporting period?
q2 what does it mean true position? if investement falls why it doesnt affect Financial position?
major purchases of assets is also non adjusting..because we cant change Financial Position ater reporting date. right?
the sale of inventories valued at cost at the end of the reporting period for figure in excess of a cost.
why this is non adjusting?
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