Which of the following statements is incorrect with respect to AASB 110 Events After the Reporting Period?
A) An entity shall adjust the amounts recognised in its financial statements to reflect adjusting events after the reporting date.
B) If an entity declares dividends to holders of equity instruments after the reporting date, the entity shall not recognise those dividends as a liability at the reporting date.
C) An entity may prepare its financial statements on a going concern basis if management determines after the reporting date that it intends to go on voluntary liquidation.
D) An entity shall not adjust the amounts recognised in its financial statements to reflect non-adjusting events after the reporting date.

Question

Quizplus · Accepted Answer

AASB 110 requires an entity to prepare its financial statements on a going concern basis unless management intends to liquidate the entity or cease trading, or has no other realistic alternative but to do so. If management determines after the reporting date that it intends to go on voluntary liquidation, it is an adjusting event and the financial statements should be prepared accordingly. Therefore, option C is incorrect as it suggests that an entity may prepare its financial statements on a going concern basis after management determines to go on voluntary liquidation. Options A, B, and D are correct as they correctly represent the requirements of AASB 110.

Which of the Following Statements Is Incorrect with Respect to AASB