I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

Events after the reporting period 

On 22 January 20X9, there was a fire at the company's warehouse. As a result, inventories costing a 

total of $250,000 were destroyed. These inventories are included in assets at the reporting date.  

 EXAM FOCUS POINT 

Expect to be asked whether an item is adjusting or non-adjusting. You may well be asked to adjust for 

an adjusting item. 

BPP Tutor Toolkit Copy

---

CHAPTER 21  

//

  EVENTS AFTER THE REPORTING PERIOD 

 

379 

 

Events after the reporting period which provide additional evidence of conditions existing at the 

reporting date will cause adjustments to be made to the assets and liabilities in the financial statements. 

 

Events that provide further evidence of conditions that existed at the reporting date should be adjusted 

for in the financial statements. 

 

Events which do not affect the situation at the reporting date should not be adjusted for, but should be 

disclosed in the financial statements. 

 

 

1 

When does an event after the reporting period require changes to the financial statements?  

2 

What disclosure is required when it is not possible to estimate the financial effect of an event not 

requiring adjustment? 

A No 

disclosure 

B 

A note to the accounts giving what information is available 

3 

Which of the following items are adjusting events? 

1 

Inventory found to have deteriorated 

2 

Dividends proposed at the year end 

3 

A building destroyed by fire after the reporting date 

A 1 

only 

B 2 

only 

C 3 

only 

D 

None of them 

4 

Which of the following items are non-adjusting events? 

1 

Inventory destroyed by flood two days before the reporting date 

2 

A customer goes bankrupt 

3 

Fall in value of an investment between the reporting date and the date the financial statements 

are finalised 

A 1 

only 

B 2 

only 

C 3 

only 

D 

None of them 

5 

A receivable has been written off as irrecoverable. However, the customer suddenly pays the written-off 

amount after the reporting date. This event is a non-adjusting event. True or false? 

QUICK QUIZ 

CHAPTER ROUNDUP 

BPP Tutor Toolkit Copy

---