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IAS 10 Events After the Reporting Period prescribes relevant treatment for events that occur after an entity's reporting period has ended. a) Explain what
IAS 10 Events After the Reporting Period prescribes relevant treatment for events that occur after an entity's reporting period has ended. a) Explain what is meant by the term "Events After the Reporting Period." Your answer must clearly distinguish between an "Adjusting event" and a Non Adjusting event and provide one example in each case. (5 marks) b) EARP Ltd is finalising its financial statements for year ended 31 December 2014 has identified the following issues: 1. A smaller customer who owed EARP Ltd 45,000 as at 31st December 2014 was declared bankrupt on 14th January 2015. (3 Marks) 2. On 3rd January 2015 a fire broke out in one of EARP's warehouses destroying its contents. The carrying value of the warehouse and its inventory was 8.5 million and 4 million respectively. EARP Ltd has been notified that its insurance policy will only cover C6.25 million of the damages. (4 Marks) 3. Inventory stored in another warehouse was valued at its original cost of 320,000 in the Statement of Financial Position on 31 December 2014. On 8th January 2015 this batch of stock was sold for 167,000. (3 Marks) Required: a) Explain the treatment of the ALL above items in the financial statements for the year ended 31st December 2014. (Marks as indicated)
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a Events After the Reporting Period refers to events that occur between the end of the reporting period and the date when the financial statements are authorized for issuance These events can be class...Get Instant Access to Expert-Tailored Solutions
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