Hawk Plc has borrowed substantially in foreign currency loans.An unexpected major downturn in the British economy after reporting date has substantially weakened the British pound.It appears that Hawk Plc will not be able to meet the foreign currency debt as it falls due.According to IAS 10,how should this event be reported in the financial statements?
A)additional extensive disclosure of the realisation value of assets and the amounts at which liabilities are expected to be settled
B)recognition of the assets in the financial statements at fair value and the liabilities reported at their settlement amounts
C)additional extensive disclosures about the timing and maturity date of debts and the cash flow shortfalls expected
D)recasting of the financial statements using fair value basis

Question

Quizplus · Accepted Answer

IAS 10 requires additional extensive disclosure of the realisation value of assets and the amounts at which liabilities are expected to be settled when an entity is unable to meet its foreign currency debt as it falls due.

Hawk Plc Has Borrowed Substantially in Foreign Currency Loans