What is define an adjusting event and non-adjusting event

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Reference no: EM132647079

Plastics Limited is a large manufacturing company. The company has a year end of 31 December and annual financial statements are authorised for issue on the 20th February every year. After the year end, but prior to the financial statements being authorised for issue, the following material events occurred:

a) It was discovered that an account receivable of R50 000, existing at the year-end date will now not be received.
b) On the 15th of February, Plastics Limited announced a bid to take over its competitor.
c) Some material errors were discovered in the financial statements, which indicate that the financial statements are incorrect.
d) The factory workers at the company have started a strike action for an indefinite length of time. The factory has to temporarily stop production as a result of the workers' action. The strike commenced on the 10th January subsequent to year end.

Required:

Question 1: Define an adjusting event and non-adjusting event.

Question 2: For each of the scenarios above, state whether it should be accounted for as Adjusting OR Non-adjusting in accordance with IAS 10 Events after the Reporting Period. (For each of the events, state whether they should be accounted for as an adjusting or non-adjusting event and justify your answer with reference to IAS 10). Include journal entries where possible.

Reference no: EM132647079

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