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Hi there Sir,
I recently came across a question in the bpp kit
Which stated that a property held for sale
Was sold for above its FVLCS
And gain =150K
We had to determine the gains etc.
The mark scheme stated that it would be a non adjusting event under IAS 10
But in our notes its stated that the determination of purchase/sale price of PPE is an adjusting event ?Sometimes it’s better not to mention the word ‘adjusting’ at all.
I don’t think you can take account of the ultimate sales proceeds until the PPE is actually sold, because of the uncertainty. Did the buyer have it in his mind to pay the extra 150 – again we don’t know.
Compare to inventory, where if you’ve got stock that is rubbish, and it all gets thrown away after the year end – well that would be adjusting.
In the exam write the knowledge point
ADJUSTING = GIVES EVIDENCE OF CONDITION AS AT THE YEAR END
And then press the gamble button.
As always, it is the KNOWLEDGE that puts scores on the doors. 🙂
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