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The nancial statements of Xeni for the year ended 31 March 20X0 were authorised for issue on 20 June 20X0 and were approved by the shareholders at the annual general meeting on 19 July 20X0. The
following signi cant events occurred after the year end:
1. A factory was destroyed by re on 3 May 20X0
2. An asset was sold during the year ended 31 March 20X0 and the proceeds from the sale were nally determined on 28 June 20X0.
Which of the above events would be classified as non-adjusting events?Answer. Only 1
As per my understanding, adjusting events are those event that occur on or after the reporting date but before the date the financial statement are authorised for issue (by the Board) and give further evidence on the estimate of the items in financial statement.
2 as per the answer is an adjusting event but it was discovered after the authorisation date, therefore should it not be a non-adjusting event?
It is an adjusting event because the sale took place before the year end and we should record the correct proceeds even though we didn’t find out what they were until later.
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