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Hi stephen, there is a question in the bpp exam kit (Q# 39; Lizzier).
In the question, the company’s position was quite poor at year-end and the position got worsened resulting in the breach of loan covenant on 31st March, 20X3. FS were authorised for issue at April end.
My query is why is such an event is considered a non-adjusting event?Kindly guide.
Regards
Please do not waste time sending follow up posts – as you know this is a free service and we do not give a 24 hour service.
Strictly speaking, there had been no breach of covenant at the year end so the event might be classed as non-adjusting. However, as the answer states, consideration should be given to potential FS adjustments.
As I am sure you know, this is discussion as opposed to a knowledge question.
oh i am sorry stephen, actually in this question there were no reasons given for breach of loan being non-adjusting. Sorry for the inconvenience.
PS: you usually reply within hours so that what i was used to, don’t get me wrong stephenRegrads
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