Torquay Ltd’s financial year ended on 30 June 2023. The following events occurred between the end of the reporting period and the date the directors of Torquay Ltd expect to authorize the financial statements for issue, namely 15 September 2023.

REQUIRED

Classify the following events as either adjusting or non-adjusting events occurring after the reporting period, and indicate what sort of disclosure is required.

a. Before the date the financial statements were authorized for issue, judgement against the company was handed down by the court finding the company was in fact liable for damages incurred by a customer that resulted from a faulty product. The court case commenced before the end of the reporting period.

b. On 31 August 2023, the directors decided to restructure a loss-making division.