Events after the reporting date are of two types:
Type 1 Those that provide new evidence about conditions that existed at the reporting date
Type 2 Those that relate to new conditions arising after the reporting date
Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Both type 1 and type 2 events will affect the contents of the full annual report of the previous period. Type 1 events provide new evidence about conditions that existed at the reporting date, which could lead to adjustments in the financial statements of the previous period. Type 2 events relate to new conditions arising after the reporting date, which could require disclosures in the financial statements of the previous period or affect the going concern assumption. Therefore, both types of events could impact the completeness and accuracy of the full annual report of the previous period.

Events After the Reporting Date Are of Two Types