Classify the events into adjusting and non-adjusting events

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Question - Fiji airways is the main flight service provider for Fiji. The following events took place after the end of the reporting period, 30 June 2022, but before the date the accounts were authorized, 15 September 2022.

(a) On 17 July 2022, Fiji Airways had its main flight cancelled due to a suspected Covid case. Insurance will cover the health and safety costs of the passengers but lost sales representing $500 000 in profits are not covered.

(b) On 19 July 2022, Fiji Airways received advanced bookings with advance payments for its summer flights. Due to spike in the COVID 19 cases, all flights were cancelled and the aircrafts grounded on 28 July 2022. Fiji Airways will make a full refund to its customers of $525 000 which had been paid in advance on 29 June 2022.

(c) On 29 August 2022, a lawsuit was lodged against Fiji Airways by the employees and the unions for wrongful dismissal in the 17 July economic downturn of the economy, alleging negligence, and claiming $4 million in damages. No date has yet been set for the court hearing.

(d) On 1 September 2022 the directors of Fiji Airways resolved to issue to the public 9 000 5% debentures of $10 each, payable $5 on application and $5 on allotment for recovery of its airline income.

Required - Classify the above events into adjusting and non-adjusting events after the end of the reporting period, justifying your choice.

Reference no: EM133070140

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