/
Post Balance Sheet Events Post Balance Sheet Events

Post Balance Sheet Events - PowerPoint Presentation

stefany-barnette
stefany-barnette . @stefany-barnette
Follow
419 views
Uploaded On 2016-08-11

Post Balance Sheet Events - PPT Presentation

Waxwork ACCA June 2009 Scope and objectives It prescribes a when an entity should adjust its financial statements for events after the reporting period b the disclosures that an entity should give about the date when the financial statements were ID: 441503

period events entity reporting events period reporting entity financial adjusting date statements waxwork concern event information existed disclose issue disclosure conditions ias

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "Post Balance Sheet Events" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

Post Balance Sheet Events Waxwork

ACCA June 2009Slide2

Scope and objectivesIt prescribes:(a) when an entity should adjust its financial statements for events after the reporting period;

(b) the disclosures that an entity should give about the date when the financial statements were

authorised

for issue and about events after the reporting period.

The Standard also requires that an entity should not prepare its financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is not appropriate

It should be applied in the accounting for, and disclosure of, events after the reporting period.Slide3

Events after the reporting periodThose events,

favourable

and

unfavourable

, that occur between the end of the reporting period and the date when the financial statements are

authorised

for issue.

Two types of events can be identified:

(a) those that provide evidence of conditions that existed at the end of the reporting period (

adjusting events )

(b) those that are indicative of conditions that arose after the reporting period (

non-adjusting events )Slide4

Recognition and MeasurementAdjusting events:An entity shall adjust the amounts

recognised

in its financial statements to reflect adjusting events after the reporting period

Non adjusting events

An entity shall not adjust the amounts

recognised

in its financial statements to reflect non-adjusting events after the reporting period

.Slide5

DividendsIf an entity declares dividends to holders of equity instruments (as defined in IAS 32 Financial Instruments: Presentation

) after the reporting period, the entity shall not

recognise

those dividends as a liability at the end of the reporting period.

It is disclosed in the notes in accordance with IAS 1

Presentation of Financial Statements

.Slide6

Going concernAn entity shall not prepare its FS on a going concern basis if :management determines after the reporting period either that it intends to liquidate the entity or to cease trading, or that it has no realistic alternative but to do so.Slide7

DisclosureAn entity shall disclose the date when the financial statements were authorised

for issue and who gave that

authorisation

.

If the entity’s owners or others have the power to amend the financial statements after issue, the entity shall disclose that fact.Slide8

DisclosureIf an entity receives information after the reporting period about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions, in the light of the new information (

When evidence becomes available after the reporting period about a contingent liability that existed at the end of the reporting period

)

In addition to considering whether it should

recognise

or change a provision under IAS 37, an entity updates its disclosures about the contingent liability in the light of that evidence.Slide9

DisclosureAn entity shall disclose the following for each material category of non-adjusting event after the reporting period: (a) the nature of the event; and

(b) an estimate of its financial effect, or a statement that such an estimate cannot be made.Slide10

Waxwork aPost BS events are events occurring after the BS date but before the accounts are signed.

Adjusting events are those events which give us more information regarding the financial situation which existing at the Balance Sheet date.

Non adjusting events are those events ‘which simply happen’ after the balance sheet date.

The exception to the above is when a non adjusting event threatens going concern.

Adjusting events should be disclosed with full narrative and illustration of the financial effects

Note examiners comments here- he did not want examples, very strange!Slide11

Waxwork b)1)Non adjusting event, value of inventory at the BS date was not reduced. Concept here that at the BS date the inventory was not unsaleable or required a reduction in value, the fall occurred because of an event which happened after the BS date- as opposed to further information becoming available about something which existed at the BS date.

Large trading losses may lead us to question going concern. Waxwork should certainly disclose the loss of $16m, they may disclose the insurance claim of $9mSlide12

Waxwork b)11)The subsequent sale give us information about a condition that existed at the BS date and therefore we should write down the inventory.At BS date 70% of the stock had a cost of $322000. This should be written down to $238k (280x85%). Dr

CofS

Cr

Inv

(BS) 84k

The remaining stock with a value of $138k (460-322) should be investigated and possibly written down by 26% (238/322=74%) or some other sum if necessarySlide13

Waxwork b)111) The changes are announced after the year end so no adjustment is required