Royal Sheffield Motorcycles (RSM) is a public entity headquartered Rotherham, England with a December 31 year end. RSM owns several manufacturing plants in the Phillipines. In January, After the reporting period is over, but before the financial statements are authorized for issuance, RSM's main manufacturing plant is completely destroyed by a devastating monsoon. Along with the factory, 1200 brand new Classic 500cc motorcycles are destroyed. This is a non-adjusting event and does not require a note disclosure.

Question

Quizplus · Accepted Answer

This is considered a non-adjusting event after the reporting period since it occurred after the year-end. However, it is significant and could influence the decisions of the users of the financial statements. Therefore, it requires disclosure in the notes to give users proper context about the financial impact that occurred after the balance sheet date.

Royal Sheffield Motorcycles (RSM) Is a Public Entity Headquartered Rotherham