Problem:
A company's workforce went on strike for an indefinite period commencing on 5 August 20X1. The strike was expected to cause severe financial conditions for the company. The financial statements for the year ended 30 June 20X1 were expected to be completed by 7 August 20X1. In accordance with AASB 110 Events after the Reporting Date, the appropriate treatment regarding the strike is:
Select one:
- Disclosure as a note to the financial statements, as it is a non-adjusting event
- To adjust the financial statements, as it is a non-adjusting event
- To adjust the financial statements, as it is an adjusting event
- Disclosure as a note to the financial statements, as it is an adjusting event
Note: Please provide reasons to support your answer.