AB Ltd engaged in manufacturing facility and has year end of 31 December 2012. Its date of authorization of financial statements for issue was 10 February 2013 and the annual general meeting is scheduled on 7 March 2013. The following events occurred as follows:

(a) The company's major warehouse and the inventory it contained, was completely damaged because of a fire explosion took place on 12 January 2013. The warehouse and the inventory were to have a carrying value $20 million and $12 million respectively on this date. The company is expected to recover up to maximum of $18 million as it has not updated its insurance cover. The operations of the entity were severally interrupted and the entity expects to face losses for coming few years.

(b) A particular type of inventory held by AB Ltd at a different location was recorded at its cost of $920,000 at 31 December 2012 in the statement of financial position. Th&e entity sold 70% of this inventory for $560,000 on 15 January 2013, incurring a commission expense of 15% of the selling price of the inventory.

(iii) The government introduced tax changes on 13 March 2013, due to which the tax liability recorded by entity at 31December 2012, will increase by $960,000.

Required Explain the appropriate accounting treatment of the events in the financial statements of AB Ltd and prepare journal for adjusting events and disclosure if needed