Financial Accounting: Events after the Reporting Period According to the standard AASB 110, Paragraph 1, the objective of such standard is to bring the proper adjustments into the Financial Statements; also it is helpful in defining what can be adjusted and what cannot be adjusted. Furthermore it is of indeed importance for disclosures to write the specific dates of the events that occurred after the reporting date but before the issuing. Whereas Accounting restricts us to issue financial statements on a going concern basis when there is an event occurred before issuing the financial statements.
This is an un-adjusting event, because there was no such liability existed at that time, hence it will be disclosed in notes to the financial statements only (AASB 110, paragraph 12, 13). The accounting treatment will be as follows:
|2-Jul-14||Debit $||Credit $|
|P/L appropriation account||10000|
|Dividend proposed after financial reporting|
- This is an un-adjusting event, because, it has occurred after the reporting date and was not previously recorded as well, and neither; recognition of this event will occur. Hence this can only be disclosed in notes to the financial statements (AASB 110, paragraph 3b).
- This is an adjusting event, because it was earlier recorded and now needs to be adjusted on the basis of current invoice (AASB 110, paragraph 9c).
|4-Jul-14||Debit $||Credit $|
|Adjusting of overstated Inventory account as per the Invoice price|
- This is an un-adjusting event, because it occurred after the reporting date and also it was not recorded previously in books of accounts, therefore it can only be disclosed in notes (AASB 110, paragraph 3b).Again this event is un-adjustable in the current financial statements, because, it has occurred after the reporting date, and there was no such recognition of this event created previously, therefore it will be disclosed in notes only (AASB 110, paragraph 3b).
- This is an adjusting event, because Bob ltd has previously recognized this as a provision liability, and hence it has to be reflected in financial statements (AASB 110, paragraph 9a)
|7-Jul-14||Debit $||Credit $|
|Tax Expense|| ||30000|
|Previously recognized tax expense as a fine has been waived.|