Wattle Ltd is in the process of completing its financial reports for the period ended 30 June 2009 when its accountant completes the collection of information about the realisable value of inventory as at reporting date.A number of items are reflected at a cost greater than net realisable value with a material effect on the accounts.What treatment does AASB 110 require for this event?
A) It should be disclosed in the Directors' Declaration.
B) The effect on the accounts should be disclosed in the notes to the financial statements.
C) No disclosure is required.
D) The financial statements should be adjusted to reflect the impact of the event.
E) None of the given answers.

Question

Quizplus · Accepted Answer

AASB 110 requires that if events after the reporting period provide evidence of conditions that existed at the end of the reporting period, such as inventory being overvalued, the financial statements should be adjusted to reflect the impact of the event.

Wattle Ltd Is in the Process of Completing Its Financial