Which of the following subsequent events would require an adjustment to the financial statements under IFRS?
A) The company issues shares shortly after year-end.
B) An uninsured fire loss occurred early in the subsequent year.
C) A major customer declares bankruptcy early in the New Year.
D) The company reaches an agreement early in the new year to refinance certain current liabilities over an additional two-year period.

Question

Quizplus · Accepted Answer

A major customer declaring bankruptcy early in the New Year affects the company's ability to collect receivables that existed at the balance sheet date, indicating a condition that existed at the end of the reporting period. This requires an adjustment to the financial statements under IFRS to reflect the impaired ability to collect those receivables.

Which of the Following Subsequent Events Would Require an Adjustment