Which of the following material after reporting date events is considered an adjusting event?
A) settlement after reporting date of a court case that confirms that the entity has a present obligation on reporting date
B) an announcement of a plan to discontinue a business operation
C) decline in market value of investments between reporting date and the date when the financial report is authorised for issue
D) settlement after reporting date of a court case that confirms that the entity has a present obligation on reporting date, and decline in market value of investments between reporting date and the date when the financial report is authorised for issue

Question

Quizplus · Accepted Answer

An event that confirms an obligation as of reporting date is an adjusting event, and the settlement after reporting date of a court case that confirms an entity's present obligation meets that criterion. B is a non-adjusting event because it does not relate to conditions as of reporting date. C is also a non-adjusting event because market value changes after reporting date do not relate to conditions that existed on reporting date. D includes an adjusting event (Settlement after reporting date of a court case that confirms that the entity has a present obligation on reporting date) and a non-adjusting event (decline in market value of investments between reporting date and the date when the financial report is authorized for issue), the presence of non-adjusting event precludes the classification of the combined event as adjusting.

Which of the Following Material After Reporting Date Events Is