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

Harrier Ltd has borrowed substantially using foreign currency loans.An unexpected major downturn in the Australian economy after reporting date has substantially weakened the Australian dollar,increasing the size of the debt materially.According to AASB 110,how should this event be reported in the financial statements?

The following are material events that occurred for Virgil Ltd between the reporting date and the date when the financial report is authorised for issue. I Bankruptcy of a customer that occurs after the reporting date II Determination after the reporting date of the costs assets purchased before the reporting date III Decline in market value of investments after the reporting date of investments purchased before the reporting date Dividends declared after the reporting date A lawsuit filed by a customer after the reporting date VI Discovery of fraud that shows that the financial report is incorrect Which of the following options identify all the non-adjusting events for Virgil Ltd,in accordance with AASB 110 Events After the Reporting Period?

The following are material events that occurred for Fraser Island Ltd between the reporting date and the date when the financial report is authorised for issue. I Acquisition of a major business competitor II Discovery of inventory items damaged by floods before the reporting date III Receipt of information after the reporting date indicating that an asset was impaired at reporting date Settlement of a court case outstanding for many years that confirms that the entity had a present obligation at the reporting date Major litigation arising solely out of events that occurred after the reporting date VI Dividends declared before the reporting date but paid after the reporting date Which of the following options identify all the non-adjusting events for Fraser Island Ltd,in accordance with AASB 110 Events After the Reporting Period?

Which of the following material after reporting date events is considered an adjusting event?

Events after reporting date should not be disclosed because the statement of financial position is 'as at' a particular date.

If new events or conditions indicate that the entity will not be able to continue as a going concern,the entity must:

If an entity is no longer a going concern,AASB 110 requires that the financial reports be prepared on a liquidation basis.Discuss why this treatment is inconsistent with the treatment of non-adjusting events.

Requirements other than those in AASB 110 regarding after-reporting-date events include:

AASB 110 specifies that adjusting events should be considered against two criteria to determine their treatment.The two criteria are:

If it becomes apparent to an entity that new events or conditions have resulted that indicate that the entity is no longer a going concern,the entity must:

Karingai Co Ltd has been experiencing cash flow difficulties and sought a long-term loan from a merchant bank to enable it to restructure its financing from short-term to long-term debt.The loan has been approved by the bank after reporting date and the funds are expected to be received before the time of completion of the accounts.How should this event be reported according to AASB 110?

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

In the case of a non-adjusting event,AASB 110 requires it to be:

Which of the following statements is incorrect with respect to AASB 110 Events After the Reporting Period?

If an adjusting event that occurs after reporting date is considered to be immaterial AASB 110 requires that the entity:

AASB 110 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.

After the auditor has signed the audit report the next step in the process is to:

Explain the period covered by AASB 110 Events After the Reporting Period and discuss how the period covered is determined.

Wattle Ltd is in the process of completing its financial reports for the period ended 30 June 2014 when its accountant completes the collection of information about the realisable value of inventory as at reporting date.A number of items are reflected at a cost greater than net realisable value with a material effect on the accounts.What treatment does AASB 110 require for this event?

Provide an example of an adjusting event and explain why this event satisfies the criteria of AASB 110 Events After the Reporting Period.