A. MFRS 110 defines event after the reporting period as those events, both favourable and unfavourable, that occur between the end of reporting period and the date when the financial statements are authorized for issue.

The standard has identified two types of post reporting period events.

Required:

a. Identify and explain the TWO (2) types of post reporting period events.

b. Give ONE (1) example for each event.

B. Zorro Berhad is finalizing its financial statement for the year ended 31 May 2018 and

expected to be authorized for issue on 31 July 2018.

i. A fire on 3 June 2018 destroyed some equipment which were not insured. The loss was estimated at RM100,000.

ii. The movement in the foreign exchange rate of 15% between 30 June 2018 and 15 July 2018 has resulted in reduction of foreign assets valued by RM2 million.

iii.A provision for doubtful debt was provided at 15% from the outstanding debtors. In June 2018, the company realized that it has over provided the provision by 5%.

Required:

Identify the nature of each transaction and advise the appropriate treatment for each item.

(6 marks)