Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Adjusting and non adjusting events
- This topic has 3 replies, 3 voices, and was last updated 12 years ago by MikeLittle.
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- October 26, 2011 at 11:43 am #50230
Could you provide me examples of adjusting and non-adjusting evens, as this matter is confusing.
For exa;Non adjusting is fire
Adjusting-litigation /as condition existed at YE/
2.What is the difference in audit work in the 3 periods /accounts non signed-active duty, ………2.accounts signed,3. fin.statements issued-passive duty
In 3 cases the fin.statements should be amendedOctober 27, 2011 at 6:00 pm #89100Non-adj, yes, fire
Adj, evidence of after date sales at less than cost, or receivable at year end goes bad after year end
Differences in audit work? I would have said the real difference was in the procedure necessary to arrive at an appropriate audit opinion.
If fin stats not yet approved by directors, persuade them to adjust ( or disclose, as appropriate )
If fin stats approved by directors but not yet got auditors’ opinion, get directors to withdraw their approval, amend the fin stats, reapprove, and then get auditors’ opinion.
If auditors have signed and fin stats circulated, but still before AGM, get directors to recall the fin stats. Auditors undo their opinion, directors withdraw their approval, fin stats amended, directors reapprove, auditors re-report, fin stats reissued.
If after AGM, auditors write to shareholders and say fin stats can no longer be relied upon EXCEPTIONALLY RARE!!!
November 1, 2011 at 8:23 pm #89101One of the adjusting events that i think would be make you understand in a complicated situation,e.g.Development cost capitalized. I hope you know that if certain conditions are met development costs cn be capitalized and shown under assets in the balance sheet. If u get any evidence after the year end that the development cost incurred for the product will no longer be feasible(the product can no more be sold dude to breach of regulation) then the development cost capitalized must be reversed. One of the main things is going concern problems that comes under adjusting events. An i right Mr.MikeLittle??
November 18, 2011 at 5:35 pm #89102I’m not convinced about your devel costs example. If the regulation was effected only AFTER the year end, and that as at the year end the proposed product was still viable and not potentially to be banned, the I suggest that change in regulation ( and your proposed treatment ) should be a non-adjusting subsequent event with a full disclosure note.
Going concern non-adjusting events are treated as though the event had occurred before the year end and are therefore treated as adjusters
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