Part A ( 2 Marks)

In relation to the fisheries business operation of ABC Ltd, the following events took place after the 30 June 2022 reporting period end

On 19 July 2022, ABC Ltd took delivery of a fishing net for its prawn trawler. The net was purchased from a UK manufacturer on delivered duty paid shipping terms and was in transit at the end of the reporting period. An inspection of the net revealed significant structural flaws and the net was returned to the supplier on 28 July 2022. ABC Ltd is to receive a full refund of the $650 000 purchase price which had been paid in advance on 29 June 2022.

Required:

Classify the above event into adjusting and non-adjusting event after the end of the reporting period, justifying your choice.

Part B (2 Marks)

"It has been mentioned that the Financial Reporting Council (FRC) is involved in the development of accounting standards setting process of Australian Accounting Standard Board (AASB)". Do you agree with this statement and provide your argument for your answer.