CIMAPRA19-F01-1 Exam - Topic 2 Question 9 Discussion

Question

UV's financial statements for the year ended 31 March 20X8 were approved for publication on 30 June 20X8.

In accordance with IAS 10 Events After the Reporting Period, which of the following material events would have been classified as a non-adjusting event in these financial statements?

Yolando · Accepted Answer

D) On 28 April 20X8 a fire destroyed half of UV's main production facility. Output was severely reduced for six months.

Yolando · Answer

A) On 1 June 20X8 UV's auditors discovered that an error in valuation had caused the closing inventory to be overvalued by $150,000.

Yolando · Answer

B) On 10 April 20X8 UV received a communication stating that one of its customers had ceased trading and gone into liquidation. The balance outstanding at 31 March 20X8 was unlikely to be paid.

Yolando · Answer

C) On 1 June 20X8 UV was awarded damages of $70,000 in respect of a legal claim that it had made against the local government authority in October 20X7.