Question

Each of the following events occurred after the reporting date of 31 March 2019, but before the financial statements were authorised for issue.

Which would be treated as a NON-adjusting event under IAS 10 Events after the Reporting Period?

1. The settlement of an insurance claim for a loss sustained in December 2018
2. A public announcement in April 2019 of a formal plan to discontinue an operation which had been approved by the board in February 2019
3. Evidence that £20,000 of goods which were listed as part of the inventory in the statement of financial position as at 31 March 2019 had been stolen

A sale of goods in April 2019 which had been held in inventory at 31 March 2019. The sale was made at a price below its carrying amount at 31 March 2019

Answer 1

Non-adjusting events are events occurring after the reporting date that do NOT provide evidence of conditions that existed at the end of the reporting period.

Accounting treatment: do not adjust financial statements for non-adjusting events. The following disclosure shall be made:

• The nature of the event, and
• An estimate of its financial effect or a statement that such an estimate cannot be made.

Correct answer is-

C. Evidence that £20,000 of goods which were listed as part of the inventory in the statement of financial position as at 31 March 2019 had been stolen

A sale of goods in April 2019 which had been held in inventory at 31 March 2019. The sale was made at a price below its carrying amount at 31 March 2019