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Please, i want to know from example 2 , that fire outbreak which was classified as non adjusting event , the building was in use and incorporated in the FS with a value of $500,000, but because of the fire outbreak that caused a damage, it was reduced to half of the value.
The definition says adjusting events are those after the reporting that provide evidence of condition that exist at the reporting date.
While Non adjusting events are events after reporting date which concerns conditions that arose after the reporting date.
The similarity is that both events are after reporting date but one provides evidence that condition exist at the reporting date and the other after the reporting date.
My question is , the fire outbreak (events) after reporting date , was it an evidence that concern condition that arose after the reporting date? If yes, please can you outline it from the question?
Thanks in advance .
Hi,
If the fire broke out after the reporting date, then the condition did not exist at the reporting date, as the asset would have been fine having suffered no fire damage.
Thanks
Thank you very much . So if the fire outbreak happens as a condition that provide evidence at the reporting date, it should be an adjusting event?
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