Zoo Ltd, a disclosing entity, has a financial year end of 31 March.On 10 April 20X4, the auditors discovered some equipment in a remote warehouse that had not been recognised in Zoo Ltd's financial statements.This equipment had been Zoo Ltd's property for about five years.
These assets should:
A)be recognised in the financial statements for the financial year ended 31 March 20X4
B)not be recognised in the financial statements
C)be recognised in the financial statements for the financial year ended 31 March 20X5
D)be recognised in the half year financial statements for the half year ended 30 September 20X4

Question

Quizplus · Accepted Answer

Assets should be recognized in the financial statements for the period in which they were owned, even if they were discovered after the year-end. Since the equipment was owned by Zoo Ltd for about five years, including the year ended 31 March 20X4, it should be recognized in the financial statements for the year ended 31 March 20X4.

Zoo Ltd, a Disclosing Entity, Has a Financial Year End