Question 1

Which of the following material after-reporting-date events is a non-adjusting event?

Accepted Answer

A) major disposal of assets before the reporting date 
B) expropriation of assets by government before the reporting date 
C) issue of preference shares shortly after the reporting date 
D) settlement before authorisation date of the financial report of a lawsuit filed by a customer three years ago 
A) major disposal of assets before the reporting date 
B) expropriation of assets by government before the reporting date 
C) issue of preference shares shortly after the reporting date 
D) settlement before authorisation date of the financial report of a lawsuit filed by a customer three years ago

Question 2

Birong Plc.issued a £200 million preference share issue after reporting date.What is the classification of this subsequent event and what is the accounting treatment prescribed in IAS 10?

Accepted Answer

A) adjusting event; no disclosure necessary 
B) adjusting event; with appropriate disclosure 
C) non-adjusting event; no disclosure necessary 
D) non-adjusting event; with appropriate disclosure 
A) adjusting event; no disclosure necessary 
B) adjusting event; with appropriate disclosure 
C) non-adjusting event; no disclosure necessary 
D) non-adjusting event; with appropriate disclosure

Question 3

Harrier Plc has borrowed substantially using foreign currency loans.An unexpected major downturn in the French economy after reporting date has substantially weakened the euro,increasing the size of the debt materially.According to IAS 10,how should this event be reported in the financial statements?

Accepted Answer

A) The foreign currency debt should be restated at the new exchange rates and the loss recognised. 
B) No reporting is required. 
C) Harrier Plc's bank and/or debenture trustees should be notified of the potential that the company may break its debt covenant. 
D) A note disclosure of the event should be made. 
A) The foreign currency debt should be restated at the new exchange rates and the loss recognised. 
B) No reporting is required. 
C) Harrier Plc's bank and/or debenture trustees should be notified of the potential that the company may break its debt covenant. 
D) A note disclosure of the event should be made.

Question 4

If an event or transaction that occurs after reporting date does not relate to conditions that existed at reporting date then:

Accepted Answer

A) No action should be taken to report the event or transaction in the financial reports. 
B) The statement of financial position should not be adjusted but effects on the statement of comprehensive income should be reflected in that statement. 
C) The event or transaction should be disclosed in the notes to the accounts as a post-reporting date event and the financial statements adjusted appropriately. 
D) The event or transaction should be disclosed in the notes to the accounts if it is material. 
A) No action should be taken to report the event or transaction in the financial reports. 
B) The statement of financial position should not be adjusted but effects on the statement of comprehensive income should be reflected in that statement. 
C) The event or transaction should be disclosed in the notes to the accounts as a post-reporting date event and the financial statements adjusted appropriately. 
D) The event or transaction should be disclosed in the notes to the accounts if it is material.

Question 5

What is a 'non-adjusting event' in accordance with IAS 10?
 Provide examples.

Accepted Answer

As paragraph 3 of IAS 10 states non adju

Question 6

Discuss the two types of events after the reporting period.

Accepted Answer

There are generally two basic types of s

Question 7

What is an 'adjusting event' in accordance with IAS 10?
 Provide examples.

Accepted Answer

As paragraph 3 of IAS 10 states adjustin

Question 8

Provide an example of an adjusting event and explain why this event satisfies the criteria of IAS 10 Events After the Reporting Period.

Accepted Answer

Specifically,paragraph 8 of IAS 10 state

Question 9

Gowanland Co Plc is being sued over damage to farmland as a result of an accident in which poisonous chemicals were mixed with fertiliser.At reporting date there was no information about the court decision and a contingent liability had been disclosed.Subsequent to the reporting date,the court handed down its decision and upheld a substantial claim for damages.According to IAS 10 how should this event be treated in the financial statements?

Accepted Answer

A) The contingent liability note should be extended to provide additional information based on the after-reporting-date event. 
B) The contingent liability note should remain as it is because it reflects the situation existing at reporting date. 
C) The contingent liability can now be measured reliably and is no longer contingent, so it should be recognised in the financial statements as a provision. 
D) The treatment would depend on whether or not the entity had received advice from solicitors regarding the likely success of an appeal. 
A) The contingent liability note should be extended to provide additional information based on the after-reporting-date event. 
B) The contingent liability note should remain as it is because it reflects the situation existing at reporting date. 
C) The contingent liability can now be measured reliably and is no longer contingent, so it should be recognised in the financial statements as a provision. 
D) The treatment would depend on whether or not the entity had received advice from solicitors regarding the likely success of an appeal.

Question 10

The period covered by IAS 10 Events After the Reporting Period is from:

Accepted Answer

A) date of the report to date of release to shareholders. 
B) reporting date to date financial report is authorised for issue. 
C) balance date to reporting date. 
D) balance date to date financial reports are presented to the board of directors. 
A) date of the report to date of release to shareholders. 
B) reporting date to date financial report is authorised for issue. 
C) balance date to reporting date. 
D) balance date to date financial reports are presented to the board of directors.

Question 11

If an entity is no longer a going concern,IAS 10 requires that the financial reports be prepared on a liquidation basis.Discuss why this treatment is inconsistent with the treatment of non-adjusting events.

Accepted Answer

The determination of whether an entity i

Question 12

An adjusting event is one that:

Accepted Answer

A) occurs before the auditor signed the audit report. 
B) provides additional evidence of or information about conditions that existed at the reporting date. 
C) occurs after reporting date and relates to impacts that will occur before the time of completion. 
D) provides additional evidence of or information about conditions that existed at the time of completion. 
A) occurs before the auditor signed the audit report. 
B) provides additional evidence of or information about conditions that existed at the reporting date. 
C) occurs after reporting date and relates to impacts that will occur before the time of completion. 
D) provides additional evidence of or information about conditions that existed at the time of completion.

Question 13

Which of the following material after-reporting-date events is not considered a non-adjusting event?

Accepted Answer

A) a major acquisition of capital assets after the reporting date 
B) destruction of inventory by vandals after the reporting date 
C) changes in tax rates or tax laws enacted or announced after the reporting date 
D) destruction of inventory on consignment by vandals before the reporting date 
A) a major acquisition of capital assets after the reporting date 
B) destruction of inventory by vandals after the reporting date 
C) changes in tax rates or tax laws enacted or announced after the reporting date 
D) destruction of inventory on consignment by vandals before the reporting date

Question 14

Only material events should be considered for events occurring after balance date.

Accepted Answer

A) True 
 B)False

Question 15

In IAS 10 Events After the Reporting Period,a legal claim that has subsequently been settled is an example of an adjusting event.

Accepted Answer

A) True 
 B)False

Question 16

Explain the period covered by IAS 10 Events After the Reporting Period and discuss how the period covered is determined.

Accepted Answer

Events after the reporting period are de

Question 17

IAS 10 treats after-reporting-period assessments of the going concern basis of accounting as adjusting entries.

Accepted Answer

A) True 
 B)False

Question 18

IAS 10 requires additional disclosures in which of the following situations?

Accepted Answer

A) related party transactions that affect the ability of the entity to trade profitably and that occur after reporting date 
B) any event that occurs after the reporting date that would cause the entity to no longer be considered a going concern 
C) any event likely to have a material effect that occurs after the directors have signed the Directors' Report 
D) material changes to the dividends proposed for the following period that occurs after reporting date 
A) related party transactions that affect the ability of the entity to trade profitably and that occur after reporting date 
B) any event that occurs after the reporting date that would cause the entity to no longer be considered a going concern 
C) any event likely to have a material effect that occurs after the directors have signed the Directors' Report 
D) material changes to the dividends proposed for the following period that occurs after reporting date

Question 19

IAS 10 requires the financial statements to be restated to a liquidation basis and for extensive additional disclosures to be made when a change in going concern status occurs after reporting date.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following material after-reporting-date events is not considered an adjusting event?

Accepted Answer

A) determination after the reporting date of the cost of assets purchased before the reporting date 
B) receipt of information after reporting date indicating that an asset was impaired at reporting date 
C) determination after the reporting date the amount of bonus payment payable to senior executives 
D) destruction of assets due to flood after the reporting date 
A) determination after the reporting date of the cost of assets purchased before the reporting date 
B) receipt of information after reporting date indicating that an asset was impaired at reporting date 
C) determination after the reporting date the amount of bonus payment payable to senior executives 
D) destruction of assets due to flood after the reporting date

Exam 17: Events Occurring After the Reporting Date

Which of the following material after-reporting-date events is a non-adjusting event?

Birong Plc.issued a £200 million preference share issue after reporting date.What is the classification of this subsequent event and what is the accounting treatment prescribed in IAS 10?

If an event or transaction that occurs after reporting date does not relate to conditions that existed at reporting date then:

What is a 'non-adjusting event' in accordance with IAS 10? Provide examples.

Discuss the two types of events after the reporting period.

What is an 'adjusting event' in accordance with IAS 10? Provide examples.

Provide an example of an adjusting event and explain why this event satisfies the criteria of IAS 10 Events After the Reporting Period.

The period covered by IAS 10 Events After the Reporting Period is from:

If an entity is no longer a going concern,IAS 10 requires that the financial reports be prepared on a liquidation basis.Discuss why this treatment is inconsistent with the treatment of non-adjusting events.

An adjusting event is one that:

Which of the following material after-reporting-date events is not considered a non-adjusting event?

Only material events should be considered for events occurring after balance date.

In IAS 10 Events After the Reporting Period,a legal claim that has subsequently been settled is an example of an adjusting event.

Explain the period covered by IAS 10 Events After the Reporting Period and discuss how the period covered is determined.

IAS 10 treats after-reporting-period assessments of the going concern basis of accounting as adjusting entries.

IAS 10 requires additional disclosures in which of the following situations?

IAS 10 requires the financial statements to be restated to a liquidation basis and for extensive additional disclosures to be made when a change in going concern status occurs after reporting date.

Which of the following material after-reporting-date events is not considered an adjusting event?

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

An Overview of Accounting for Assets

Depreciation of Property, Plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues III: Accounting for Indirect Ownership Interest

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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