Problem
IAS 10 Events After the Regarting Period
Each of the following events occurred alter the reporting date of 31 March 2022, but before the ?nancial statements were authorised for issue.
1. Destruction of a major production plant by a ?re in April 2022.
2. A ?nal dividend is proposed on 30 March 2022 to the shareholders. Subsequently, the dividends were declared on 19 April 2022 and payable on 30 April 2022.
3. On April 10, 2022, the credit department discovered that a major customer owing $2 million has gone into liquidation.
4. A public announcement in April 2022 of a formal plan to discontinue an operation which had been approved by the board in February 2022.
Task: According to IAS 10 Events After the Reporting Period,
• Determine, for each of the above events, whether they would be treated as an adjusting or non- adjusting event. No explanations are required.
• Explain how adjusting and non-adjusting events should be accounted for in the ?nancial statements. No calculations and journal entries are required.