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Dear tutor im getting difficulty in comparing betwwen adjustung events and non adjusting events
can you expline me the following defination according to ISA10 :
adjusting events : an event after the reporting period that provides further evidence of condition that existed at the end of the reporting oeriod , including an event that indicates that the going concern assumption in relation to the whole or part of the enterprise is nor appropriate
No adjusting events : an event after the reporting period that is indicative of condition that arose after the end of reporting period
and also who i can diffrnatite between them in seniora based question .
Adjusting: eg customer owing money at 31/12 goes into liquidation 29/1. Liquidation is after the reporting period, but it gives evidence that the debt was worthless ate 31/12. Therefore, write off the debt as at 31/12.
Non-adjusting event: eg factory burning down 29/1. Factory was fine and healthy at 31/12. Therefore, not an adjusting event so don’t change non-current assets in statement of financial position. However, disclose the event by way of note as it is important for users’ proper understanding of the FS.
A scenario question should describe them clearly enough for you to decide.
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