What factors determine whether events after the balance sheet date require adjustment to the financial statements, according to FRS 21 Events after Balance Sheet Date? Explain the different accounting treatments required for contingent liabilities and contingent assets depending on their degree of probability
What factors determine whether events after the balance sheet date require adjustment to the financial statements, according to FRS 21 Events after Balance Sheet Date? Explain the different accounting treatments required for contingent liabilities and contingent assets depending on their degree of probability
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity
Section: Chapter Questions
Problem 1RE
Related questions
Question
- The financial position of an enterprise as revealed by its financial statement may be seriously affected by events occurring after the
balance sheet date and contingencies. For this reason FRS 21 Events after the Balance Sheet Date and FRS12 provisions,Contingent Liabilities and Contingent Assets lay down rules to ensure that such events and contingencies are properly reflected in financial statements.
Required:
- What factors determine whether events after the balance sheet date require adjustment to the financial statements, according to FRS 21 Events after Balance Sheet Date?
- Explain the different accounting treatments required for contingent liabilities and contingent assets depending on their degree of probability.
3. Up to what date would it normally be necessary to adjust for or disclose events after the balance sheet date or to disclose contingent liabilities and contingent assets?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning