IAS 10 Events after the Reporting Period
Da-Rocha Ltd is a listed manufacturing company which prepares its financial statements
for the year ended 31 October, 2018 in accordance with IFRS. The financial statements are
due to be authorized for issue on 15 January 2019.
i.
Da-Rocha Ltd holds an investment in the shares of a listed company, Shelga Ltd.
During November 2018 there was a material fall in the value of Shelga Ltd’s shares.
Analysts attribute the fall in value principally to a fraud dating back to December 2017
that was discovered by Shelga Ltd's management and announced publicly in November
2018.
ii.
In December 2018, the directors of Da-Rocha Ltd publicly announced a plan to reduce
the workforce by 10% as a result of worsening economic conditions.
Required:
Discuss the effects of each of the above items on the financial statements of Da-Rocha Ltd for the
year ended 31 October 2018 in accordance with IAS 10 Events after the Reporting Period
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