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Hi John
I hope you are well. Please excuse me if I am being silly but in the lecture you describe the fire in the factory as an non-adjusting event but the company becoming bankrupt as an adjusting event. I hope you can explain the difference.
I do not say that in the lecture. I refer to a company owing us money becoming bankrupt.
If we knew about the even at the end of the accounting year, would be have changed anything. For the fire, we would not have changed anything because the factory did exist at the end of the year (and so it is a non-adjusting event and we write a note).
For a customer going bankrupt, then had we known at the end of the year that they were going to go bankrupt then we would have treated the debt as being irrecoverable and so we will adjust.
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