1. NBAA, November 2007 (a) The objective of IAS 'Events after the reporting period' is to prescribe the treatment of events that occur after an entity reporting period has ended Required: Define period to which IAS 10 relates and distinguish between adjusting and none adjusting events Mkanyagen's current year end is March 2010. Its financial statement was authorized for issue on 6h may 2010 and the Annual General Meeting (AGM) will be held on 3rd June 2010. (b) The following matters have been brought to you're attention On 21 April 2010 a fire completely destroyed the company's largest warehouse and the inventory it contained. The carrying amounts of the warehouse and a inventories were Tshs 10 million and Tshs 6 million respectively. It appears that the company has not updated the value of its insurance cover and only expects to be able to recover a maximum of Tshs 9 million from the insurers. Mkanyageni's trading operations has been severely disrupted since the fire incident and its expects large trading losses for some time to income A single class of inventory held at another warehouse was valued at its cost of (ii) Tsh 460,000 at 31 March 2010. In April 2010, 70% of its inventory was sold for Tshs 280,000 on which Mkanyageni's sales staff earned to commission of 15% of the selling price. (assume that no further amount will be derived from the remaining 30% of the inventories) On 18th May 2010 the government announced tax changes which have the effect of increasing Mkanyageni's deferred tax liability by Tshs 650,000 at 31 March 2010. Required Explain the required treatment of the items (i) to (ii) above by Mkanyageni in its financial 2010 (20 marks total)