Identify the nature of the transaction or event

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Reference no: EM133185130

Questions -

Q1. MQE Ltd has suffered significant fire damage to two of their warehouses on 7 July 2022, resulting in a financial loss of $2 million worth of stock and associated items. The company generally holds around $5m total worth of inventory across all of its warehouses. The insurance claim has not yet been approved, but the company does not see any reason for this to not be the case.

Required -

a) Identify the nature of the transaction/event.

b) Provide and discuss the applicable accounting standard the transaction/event relates and why.

c) Is there a requirement for the transaction or event to be disclosed in the annual report? If so, provide a suitable disclosure note to the accounts that the company will use in their upcoming annual report or alternatively where it should appear in the financial statements. (Ensure you include amounts as well as any workings where applicable).

d) Is there a requirement for an adjustment to be made to the financial statements? If so, what would this adjustment amount be to the accounts? Provide sufficient workings (calculations) where required.

Reference no: EM133185130

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