Good Vehicles Ltd sells tractors. It does not recognise a provision for warranty because warranty claims for the past five years have been immaterial. Good Vehicles Ltd reported a profit before tax of $500 000 for the year ended 30 June 2023. The company provides the following disclosures in the notes to the financial statements for the year ended 30 June 2023. The financial statements were issued on 31 August 2023:

a. In July 2023 a warranty claim was made for a faulty brake system on 10 tractors sold to a large agricultural business in May 2023. The cost of repairing the tractors was $55 000. This amount has not been recognised in the financial statements for the year ended 30 June 2023.

b. A negligence lawsuit has been brought against Good Vehicles Ltd for damages sustained in July 2023 on account of the failure of the braking system in a tractor sold by the company in May 2023. The damages claim is for $400 000, being the cost of replacing a farm shed destroyed by the runaway tractor, but this amount has not been recognised in the financial statements because the event occurred after the reporting period.

c. In August 2023 Good Vehicles Ltd was fined $20 000 for breach of noise emission limits at its tractor assembly plant. This expense and liability has not been provided for in the financial statements as at 30 June 2023.

REQUIRED

Discuss whether the note disclosure is adequate for each of the after-reporting-period events reported. Should adjustments have been made to the financial statements for the year ended 30 June 2023?