Case 1: SAP Ltd’s financial year ends on 30 June. On 1 August 2019, SAP Ltd determined after negotiations with the taxing authorities that income tax payable for 2019 should be $1,320,000. At 30 June 2019, SAP Ltd recorded income taxes payable at $1,100,000. The financial statements were authorized for issue on 15 August 2019. (a) Review the information given in Case 1 and comment on any adjustments that might need to be made to the financial statements for the year ending 30 June 2019 pursuant to AASB 110 “Events after the Reporting Period”.
Case 1: SAP Ltd’s financial year ends on 30 June. On 1 August 2019, SAP Ltd determined after negotiations with the taxing authorities that income tax payable for 2019 should be $1,320,000. At 30 June 2019, SAP Ltd recorded income taxes payable at $1,100,000. The financial statements were authorized for issue on 15 August 2019.
(a) Review the information given in Case 1 and comment on any adjustments that might need to be made to the financial statements for the year ending 30 June 2019 pursuant to AASB 110 “Events after the Reporting Period”.
Case 2: The directors of Wynn Ltd declared a dividend of $0.15 on 15 July 2019, in relation to the financial year-ending 30 June 2019. Jay Kim, the controller of the company who is responsible for financial reporting, included the dividends in the financial statements for the year ended 30 June 2019. The financial statements were authorized for issue on 24 August 2019.
(b) Explain how to treat Case 2 in the financial statements for the year 2019 pursuant to AASB 110 “Events after the Reporting Period”.
Case 3: Philips Corp had a customer who had purchased the products of Philips for a decade. Philips found that the customer had been in financial distress and finally filed for bankruptcy on 10 July 2019. Philips had a trade receivable of $50,000 as at 30 June 2019, on which the financial year 2019 ended. The financial statements were authorized for issue on 1 August 2019.
(c) Explain how to treat Case 3 in the financial statements for the year 2019 pursuant to AASB 110 “Events after the Reporting Period”
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