- This topic has 3 replies, 2 voices, and was last updated 11 years ago by
.
- Posts
Hi mike,
There was a questn on subsequent events where an announcement has been made after the reporting period regarding the significant restructuring. i belv ths s an adjusting event and provision has to be made cz the deal would have been in the process at the end of reporting period.Is it correct?Only if the restructuring had already been started before or as at the year end.
If the DECISION had been made to restructure but that decision had NOT yet been in the public domain before the year end ie it has not been announced to the “World” before the year end, then no provision is appropriate
If the decision had been made and announced to the world then, yes, make a provision
To be an adjusting event it must relate to a condition or situation that existed as at the year end and just because the management has made a decision, they don’t create an obligation until their decision is announced – they can always reverse their earlier decision until it’s been announced
OK?
But if the negotiation were in the process regardless it wasnt announced to public .The condition of the future event exited before the year end.Doesn’t it make a n adjusting event?
No! There’s no certainty until the document is signed. When it IS signed, even though it may not have been announced, then it is an obligation and should be accounted for. But if it’s not signed and we are still in negotiation, then there is no way that it should be treated as an adjusting event when it is signed after the year end
Sorry!
- You must be logged in to reply to this topic.