mestion 4 Define an adjusting event after the balance sheet date and a non-adjusting event after the balance sheet date and state how each should be accounted for. (6 FPS Company is a large manufacturing plant. After the date of the balance sheet, but prior to the financial statements being authorised for issue, the following material events were discovered: Areceivables balance at the balance sheet date will not now be received. FPS announced a bid to take over another company. iii. Material errors show that the financial statements are incorrect. iv. The factory workforce started strike action, for an indefinite period. For each event described above, state if it should be treated as an adjusting or non-adjusting event after the balance sheet date. (6 Define 'contingent liability' and 'contingent asset'. Explain how BOTH should be treated in the financial statements. Bay #2 P.O: After the end of the reporting period, prior to authorising for issue the financial statements for year ended 2017 March 31, the following material information arose: FPS is being sued by an employee who lost a limb in an accident at work on 2017 March 15. The company is contesting the claim as the employee did not follow safety procedures, as instructed. The financial statements include a note of a contingent liability of $500 000 for personal injury damages. In a recently decided case where a similar injury was sustained, a settlement of $750 000 was awarded by the court. Although this injury is similar, circumstances of the accident in the decided case are different. State and quantify how the above situation should be treated when finalising the financial statements of FPS Company for year ended 2017 March 31. After year end, a substantial quantity of inventory was destroyed by fire. The loss was not adequately covered by insurance and that is likely to threaten the ability of the business as a going concern. (8 Discuss the matters to be considered when making decisions under IAS 10. ( (Total: