IAS 10 Events After the reporting Period

1. The Roach Company is completing the preparation of its draft financial statements for the
year ended 31 May 20X6.
On 24 July 20X6, an equity dividend of £200,000 was declared and a contractual profit
share payment of £35,000 was made, both based on the profits for the year to 31 May 20X6.
On 20 June 20X6, a customer went into liquidation having owed the company £31,000 for
the past six months. No provision had been made against this debt.
On 17 July 20X6, a manufacturing plant was destroyed by fire resulting in a financial loss
of £200,000.
Requirement
According to IAS 10 Events After the Reporting Period, which amounts should be recognized
in Roach's financial statements for the year to 31 May 20X6 to reflect adjusting events after
the reporting period?
Solution:

2. An entity's draft financial statements for the year ended 31 December 20X3 were completed
on 30 May 20X4, approved by the finance director on 7 June 20X4, authorised for issue on
20 June 20X4 and approved by the shareholders on 5 July 20X4.
The following events occurred after the reporting date (assume all amounts are significant
to the entity):
(a) Notification on 18 February 20X4 that a customer owing £100,000 as at 31 December
20X3 has gone into liquidation. The financial statements already include a specific
provision of £20,000 for this customer and the entity does not make general provisions.
(b) A rights issue on 6 April 20X4 to raise £1,500,000 for an acquisition.
(c) Confirmation on 28 May 20X4 from the entity's insurer that they will pay £500,000 for
inventories that were destroyed in a fire on 24 December 20X3. The entity had claimed
£650,000 and included this as a receivable in the financial statements.
Requirement
How should the entity treat these events in its financial statements?
Solution:
3.
Solution: