AASB 110 requires that adjusting events that meet two broad criteria should be:
A) reflected in the financial information in the statements if it is material and relates to an item that would normally be reflected in the financial statements.
B) always disclosed by way of a note to the financial statements.
C) disclosed as a contingent liability, if an unfavourable event.
D) reflected in the financial statements, if an unfavourable event; disclosed by way of note, if a favourable event.

Question

Quizplus · Accepted Answer

AASB 110 requires that adjusting events that meet the criteria of being both material and relating to an item that would normally be reflected in the financial statements should be reflected in the financial information in the statements. This means that the impact of the adjusting event should be included in the financial statements themselves rather than just being disclosed in a note. Option B is not correct, as events meeting these two criteria should be reflected in the financial statements, not just disclosed in a note. Option C is not correct, as events meeting these two criteria should be reflected in the financial statements, not disclosed as a contingent liability. Option D is not correct, as unfavorable events meeting these two criteria should also be reflected in the financial statements, not just disclosed in a note.

AASB 110 Requires That Adjusting Events That Meet Two Broad