Sir i have 2 doubts in IAS10
1) If suppose an employee or a customer gets injured before year end, but starts litigation/ legal proceedings AFTER year end, and the lawyers state it possible or probable, will it be adjusting or non adjusting event?
2) If mining( environment damage) starts before year end(with no lega or constructive obligation) and the government enacts law for rectifying previous damages(i.e. those started before year end) will it be adjusting event or non adjusting?
Ias 10
3y ago#1Hi,
1) The obligating event would be the accident at work itself but we can only determine the accounting treatment depending on what we know about the outcome by the date the accounts are signed off. This will determine if it is adjusting or non-adjusting and you'd need to look at the specifics given in the scenario.
2) At the reporting date there appears to be non legal or constructive obligation as the law was not enacted until after the year-end and so we would not make an adjustment.
Thanks