IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those events that provide evidence of conditions that existed at the end of the reporting period and non-adjusting events: which are those events that are indicative of conditions that arose after the reporting period that need to be reflected in the financial statements. Amounts recognized in the financial statements are adjusted to reflect adjusting events, but only disclosures are required for material non-adjusting events. Management's judgment is required in determining whether events that took place after the end of the reporting period are adjusting or non- adjusting events. This will be highly dependent on the reporting date and the specific facts and circumstances of each company's operations. Coronavirus has overwhelmed the world in various ways and at various times. China was the first to announce spread of the virus in November, 2019. UK announced its first case of coronavirus in February, 2020 and Ghana announced its first case in March, 2020. While company A resides in China, company B resides in the UK and C resides in Ghana. Company A's financial reporting period ends on 31t October each year; company B's financial reporting period ends on 31st December, each year and company C's financial reporting period ends on the 31st of March each year. Management of these companies may need to continually review and update the assessments up to the date the financial statements are issued given the fluid nature of the crisis and the uncertainties involved. You are required to discuss in respect of each of the companies, the potential management conclusions of the impact of the coronavirus on end of year reporting, mindful of IAS 10.
IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those events that provide evidence of conditions that existed at the end of the reporting period and non-adjusting events: which are those events that are indicative of conditions that arose after the reporting period that need to be reflected in the financial statements. Amounts recognized in the financial statements are adjusted to reflect adjusting events, but only disclosures are required for material non-adjusting events. Management's judgment is required in determining whether events that took place after the end of the reporting period are adjusting or non- adjusting events. This will be highly dependent on the reporting date and the specific facts and circumstances of each company's operations. Coronavirus has overwhelmed the world in various ways and at various times. China was the first to announce spread of the virus in November, 2019. UK announced its first case of coronavirus in February, 2020 and Ghana announced its first case in March, 2020. While company A resides in China, company B resides in the UK and C resides in Ghana. Company A's financial reporting period ends on 31t October each year; company B's financial reporting period ends on 31st December, each year and company C's financial reporting period ends on the 31st of March each year. Management of these companies may need to continually review and update the assessments up to the date the financial statements are issued given the fluid nature of the crisis and the uncertainties involved. You are required to discuss in respect of each of the companies, the potential management conclusions of the impact of the coronavirus on end of year reporting, mindful of IAS 10.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:IAS 10: Events after the Reporting Period addresses two issues: adjusting events, namely, those
events that provide evidence of conditions that existed at the end of the reporting period and
non-adjusting events: which are those events that are indicative of conditions that arose after
the reporting period that need to be reflected in the financial statements. Amounts recognized
in the financial statements are adjusted to reflect adjusting events, but only disclosures are
required for material non-adjusting events. Management's judgment is required in determining
whether events that took place after the end of the reporting period are adjusting or non-
adjusting events. This will be highly dependent on the reporting date and the specific facts and
circumstances of each company's operations. Coronavirus has overwhelmed the world in
various ways and at various times. China was the first to announce spread of the virus in
November, 2019. UK announced its first case of coronavirus in February, 2020 and Ghana
announced its first case in March, 2020. While company A resides in China, company B resides
in the UK and C resides in Ghana. Company A's financial reporting period ends on 31t
October each year; company B's financial reporting period ends on 31st December, each year
and company C's financial reporting period ends on the 31st of March each year. Management
of these companies may need to continually review and update the assessments up to the date
the financial statements are issued given the fluid nature of the crisis and the uncertainties
involved.
You are required to discuss in respect of each of the companies, the potential management
conclusions of the impact of the coronavirus on end of year reporting, mindful of IAS 10.
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