Question 1

The 'authorisation date' of the financial reports of companies is:

Accepted Answer

A)  the date the auditor prepares the audit report. 
B)  the date on which the printing of the reports is completed or they are posted on a website. 
C)  the date the reports are posted to stakeholders. 
D)  the date the Directors' Declaration is signed. 
A)  the date the auditor prepares the audit report. 
B)  the date on which the printing of the reports is completed or they are posted on a website. 
C)  the date the reports are posted to stakeholders. 
D)  the date the Directors' Declaration is signed. D

Question 2

Reporting date may occur 2 or 3 months after reporting date.

Accepted Answer

A) True 
 B)False  False

Question 3

Dividends declared after reporting date but before the authorisation for issue of the financial report do not meet the criteria of the present obligation because the identity of the shareholders is unknown until the date of payment.

Accepted Answer

A) True 
 B)False  False

Question 4

AASB 110 requires that adjusting events that meet two broad criteria should be:

Accepted Answer

A)  reflected in the financial information in the statements if it is material and relates to an item that would normally be reflected in the financial statements. 
B)  always disclosed by way of a note to the financial statements. 
C)  disclosed as a contingent liability, if an unfavourable event. 
D)  reflected in the financial statements, if an unfavourable event; disclosed by way of note, if a favourable event. 
A)  reflected in the financial information in the statements if it is material and relates to an item that would normally be reflected in the financial statements. 
B)  always disclosed by way of a note to the financial statements. 
C)  disclosed as a contingent liability, if an unfavourable event. 
D)  reflected in the financial statements, if an unfavourable event; disclosed by way of note, if a favourable event.

Question 5

In general a subsequent event is one that occurs,or the occurrence of which becomes known,after the reporting date.

Accepted Answer

A) True 
 B)False

Question 6

Cavalier Co Ltd is being sued for negligence in manufacturing a piece of equipment that has allegedly resulted in injury to an employee of the claimant business.The accident occurred after reporting date,but Cavalier has settled quickly so the outcome is now known before the authorisation date of the financial statements.The settlement is for a material amount.How should this transaction be recorded in the financial statements according to AASB 110?

Accepted Answer

A)  The event should be disclosed in a note to the financial statements. 
B)  The event should be fully reflected in the financial statements as the outcome is complete and known before the time of completion of the reports. 
C)  No reporting is required. 
D)  The event should be disclosed in a note to the financial statements and fully reflected in the financial statements as the outcome is complete and known before the time of completion of the reports. 
A)  The event should be disclosed in a note to the financial statements. 
B)  The event should be fully reflected in the financial statements as the outcome is complete and known before the time of completion of the reports. 
C)  No reporting is required. 
D)  The event should be disclosed in a note to the financial statements and fully reflected in the financial statements as the outcome is complete and known before the time of completion of the reports.

Question 7

Requirements regarding events after the reporting date are contained in AASB 110 and The Corporations Law.

Accepted Answer

A) True 
 B)False

Question 8

The disclosures AASB 110 requires for material non-adjusting events include:

Accepted Answer

A)  a description of each event. 
B)  a statement that the financial effect of each event has been recognised and a measure of the size of that effect in the financial statements. 
C)  a statement that the event occurred after reporting date. 
D)  all of the given answers. 
A)  a description of each event. 
B)  a statement that the financial effect of each event has been recognised and a measure of the size of that effect in the financial statements. 
C)  a statement that the event occurred after reporting date. 
D)  all of the given answers.

Question 9

The disclosures AASB 110 requires for a material non-adjusting event include:

Accepted Answer

A)  the financial effect of the event or, where it is not possible to estimate the effect reliably, a statement to that effect. 
B)  a description of why the event only came to be known of after reporting date. 
C)  details of the corporate governance procedures in place to ensure that further information regarding the event is gathered in a timely fashion. 
D)  the financial effect of the event or, where it is not possible to estimate the effect reliably, a statement to that effect and a description of why the event only came to be known of after reporting date. 
A)  the financial effect of the event or, where it is not possible to estimate the effect reliably, a statement to that effect. 
B)  a description of why the event only came to be known of after reporting date. 
C)  details of the corporate governance procedures in place to ensure that further information regarding the event is gathered in a timely fashion. 
D)  the financial effect of the event or, where it is not possible to estimate the effect reliably, a statement to that effect and a description of why the event only came to be known of after reporting date.

Question 10

Dividends declared after the reporting date but before the authorisation for issue of the financial report are typically recognised as a liability.

Accepted Answer

A) True 
 B)False

Question 11

What is a 'non-adjusting event' in accordance with AASB 110?
 Provide examples.

Accepted Answer

A non-adjusting event, as defined by AAS

Question 12

If non-adjusting events after the reporting date are material,non-disclosure could influence the economic decisions that users make based on the financial statements.

Accepted Answer

A) True 
 B)False

Question 13

Dividends declared and proposed after reporting date may be recognised as a liability and this is consistent with AASB 110.

Accepted Answer

A) True 
 B)False

Question 14

A non-adjusting event is one that occurs:

Accepted Answer

A)  after the reporting date. 
B)  after the auditor has signed the audit report. 
C)  after the completion of the financial reports. 
D)  after the financial statements have been distributed. 
A)  after the reporting date. 
B)  after the auditor has signed the audit report. 
C)  after the completion of the financial reports. 
D)  after the financial statements have been distributed.

Question 15

An event occurring after reporting date is a circumstance that has arisen,or information that has become available,after reporting date but before the time of completion of the report.

Accepted Answer

A) True 
 B)False

Question 16

If it becomes known after reporting date that a debtor is now not able to pay a material amount that is owed to the reporting entity,the appropriate action according to AASB 110 is to:

Accepted Answer

A)  Adjust the balance of accounts receivable and write off the bad debt and make a note disclosure that this event occurred after reporting date. 
B)  Adjust the balance of accounts receivable and write off the bad debt. 
C)  Disclose the event in the notes to the accounts. 
D)  Do nothing this period but write the debt off in the accounts for the next period. 
A)  Adjust the balance of accounts receivable and write off the bad debt and make a note disclosure that this event occurred after reporting date. 
B)  Adjust the balance of accounts receivable and write off the bad debt. 
C)  Disclose the event in the notes to the accounts. 
D)  Do nothing this period but write the debt off in the accounts for the next period.

Question 17

Reporting events after reporting date is concerned with:

Accepted Answer

A)  information that becomes available between the date the reports are completed and the date the auditor signs the audit report. 
B)  events that occur or information that becomes available after the directors sign the Directors' Declaration and before the reports are printed. 
C)  events or transactions that occur or about which information becomes available between reporting date and time of completion. 
D)  events or transactions that occur or about which information becomes available between reporting date and reporting period date. 
A)  information that becomes available between the date the reports are completed and the date the auditor signs the audit report. 
B)  events that occur or information that becomes available after the directors sign the Directors' Declaration and before the reports are printed. 
C)  events or transactions that occur or about which information becomes available between reporting date and time of completion. 
D)  events or transactions that occur or about which information becomes available between reporting date and reporting period date.

Question 18

Bonus payments that are part of an existing agreement with employees determined after the reporting date is an example of an adjusting event.

Accepted Answer

A) True 
 B)False

Question 19

Fruitcorp Ltd has been negotiating a merger with a company that is currently its major supplier.Subsequent to reporting date the merger agreement is finalised.The merger materially affects the size and structure of the new entity and should bring substantial economic benefits to all shareholders.How should this event be reported according to AASB 110?

Accepted Answer

A)  The size and significance of this event is such that it should be fully reflected in the financial accounts. New group accounts should be prepared to reflect the actual economic entity that exists at the time of completion of the financial reports. 
B)  No disclosure is required. 
C)  A description of the event, the fact that it occurred after reporting date and its financial effect on the company should be disclosed by way of a note to the accounts. 
D)  Disclosure of the event in the Directors' Declaration is required. 
A)  The size and significance of this event is such that it should be fully reflected in the financial accounts. New group accounts should be prepared to reflect the actual economic entity that exists at the time of completion of the financial reports. 
B)  No disclosure is required. 
C)  A description of the event, the fact that it occurred after reporting date and its financial effect on the company should be disclosed by way of a note to the accounts. 
D)  Disclosure of the event in the Directors' Declaration is required.

Question 20

AASB 110 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' Declaration 
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' Declaration 
D)  material changes to the dividends proposed for the following period that occurs after reporting date

Exam 23: Events Occurring After the End of the Reporting Period

The 'authorisation date' of the financial reports of companies is:

Reporting date may occur 2 or 3 months after reporting date.

Dividends declared after reporting date but before the authorisation for issue of the financial report do not meet the criteria of the present obligation because the identity of the shareholders is unknown until the date of payment.

AASB 110 requires that adjusting events that meet two broad criteria should be:

In general a subsequent event is one that occurs,or the occurrence of which becomes known,after the reporting date.

Requirements regarding events after the reporting date are contained in AASB 110 and The Corporations Law.

The disclosures AASB 110 requires for material non-adjusting events include:

The disclosures AASB 110 requires for a material non-adjusting event include:

Dividends declared after the reporting date but before the authorisation for issue of the financial report are typically recognised as a liability.

What is a 'non-adjusting event' in accordance with AASB 110? Provide examples.

If non-adjusting events after the reporting date are material,non-disclosure could influence the economic decisions that users make based on the financial statements.

Dividends declared and proposed after reporting date may be recognised as a liability and this is consistent with AASB 110.

A non-adjusting event is one that occurs:

An event occurring after reporting date is a circumstance that has arisen,or information that has become available,after reporting date but before the time of completion of the report.

If it becomes known after reporting date that a debtor is now not able to pay a material amount that is owed to the reporting entity,the appropriate action according to AASB 110 is to:

Reporting events after reporting date is concerned with:

Bonus payments that are part of an existing agreement with employees determined after the reporting date is an example of an adjusting event.

AASB 110 requires additional disclosures in which of the following situations?

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of 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

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Segment Reporting

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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