IAS 10 Events after the Reporting Period – ACCA Financial Accounting (FA) lectures
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Does materiality plays a role in discovering and adjusting book keeping error? Like if 拢1000 error was discovered in 500k turnover co.
Do we still need to adjust the accounts?
Thanks.
We only need to adjust if material
Sir,
In the last example where 500,000 new shares were issued at $2 each, why is this a non-adjusting event where it does actually affect the items in the SOFP………..i really dont get it, please help me understand this one.
Warm regards
The year end was 31.12.2016, and at that date the new shares had not been issued. So we are not going to show them on the SOFP when they had not been issued.
Hello Sir,
If fire destroys all inventory on the premises and directors consider that company is no longer a going concern then should it be an Adjusting event ?
Thank you,
Sir if we find out an error after both the reporting period and the year end or financial statement then this is defintely a non-adjusting event because we can’t adjust it since it has already been reported right?
Please correct me if I am wrong sir
The reporting period is the same as the date of the financial statements.
It is after the accounts have been signed that we are no longer able to make any adjustments.
Sir, are dividends proposed at year end adjusting or non adjusting?
Also, what about fall of value of investment between reporting date and preparation on financial statement?
They are both non-adjusting.
I really appreciate your lectures Sir. Same goes with this lecture however due to my limited capacity, some of the things flew over my head. Are there any more ways to understand the fine line drawn between adjusting and non-adjusting events? I am able to understand most of the examples you illustrated in this lecture except the one related to a debtor gone bankrupt. Since the debtor gone bankrupt after the closing of 31 Dec otherwise before that date there were no such indication of him going bankrupt. So we did the right thing earlier so why we are changing the previous year by expense it out? Provided that we must have created a GENERAL doubtful debt allowance in previous year.
This chapter is short but looks tricky.
Does the materiality concept applies only in case of non-adjusting events? and for adjusting events, everything is material even though it is minor adjustment?
I’d really appreciate your time SIR,
The question states it’s year end is 30 Sep, 2008 which were approved on 12 Jan 2009, and issued on 20 Feb, 2009.
CASE 1: I want to know about the difference between Approved Date & Issue Date?
CASE 2:
a) A credit customer with an outstanding balance at the year-end was declared bankrupt on 20 Jan, 2009.
b) Inventory valued at cost of $800 in the year-end accounts was sold for $650 on 11 Jan, 2009.
Question: Which of the following event will require an adjustment after the reporting period?
I’d really thankful for your answer, SIR!
The approved date is the date the accounts were signed and became final.
Please ask. your second question in the Ask the Tutor Forum and not as a comment on a lecture.
First of all thanks for this amazing platform.
Query: Is this not about rectification of errors when the financial period is over and books are closed and something got discovered which
Should have been recorded prior closing the books ?
The examples we discussed in the lecture seems to be when the books are closed and some event has happened “after that”.
Two situations possible (1) an event has happened after closing the books which effects something of the last year. Here seems no question of passing entry for making some adjustments since when the books were closed the event did not take place. (2) an event took place in the past which we were not aware of for whatever reason and hence did not do any entry in the last year. Obviously here adjustments to the financial documents would be required anyhow.
Thanks for your time and efforts.
Dear Sir,
If external audit of 2018 was provided in January 2019, but paid in December of 2018 should I indicate these expenses in 2018 reporting? Thank you in advance
Yes you should 馃檪