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

is uncollectable. 

The standard states that, where operating results and the financial position have deteriorated after the 

reporting date, it may be necessary to reconsider whether the going concern assumption is appropriate in 

the preparation of the financial statements (IAS 10, para. 15). 

Other examples of adjusting events are: 

 

Evidence of a permanent diminution in property value prior to the year end 

 

Sale of inventory after the end of the reporting period for less than its carrying value at the year 

end 

 

Insolvency of a customer with a balance owing at the year end 

 

Amounts received or paid in respect of legal or insurance claims which were in negotiation at the 

year end 

 

Determination after the year end of the sale or purchase price of assets sold or purchased before 

the year end 

 

Evidence of a permanent diminution in the value of a long-term investment prior to the year end 

 

Discovery of fraud or errors that show that the financial statements are incorrect 

1.4 Events not requiring adjustment 

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

disclosed in the financial statements.