Either Favourable Unfavourable Reporting †Myassignmenthelp.Com

Question: What Are the Differences Either Favourable Unfavourable Reporting? Answer: Introducation An event which is either favourable or is unfavourable which that occurs between the end of the period of reporting and also on the date on which the financial statements have been issued or have been authorised are known as the events after the report of reporting. An event that provides some of the evidence that there exists coms conditions at the end of the reporting date which includes the event that indicates the threatening of the assumption of the going concern in relation to the hole or a part of the enterprise which is not appropriate. An event after the reporting period which indicates the condition that arises after the end of the period of reporting (IAS plus, 2017). The companys night club was destroyed by fire and it has the fair value of $1750, 000 whereas the company has an insurance of an amount of $1500, 000 for the same. Since the amount is so big that the going concern assumption of the company would be affected but the same is also insured, hence, the same would be termed as a non-adjusting event. Ain addition to the above, also, the destruction of the assets that is caused by the fire which takes place after the period of the reporting does not indicate that the assets of the entity have bene impaired at the end of the reporting period. Hence, the same would not be adjusted at the account for the impairment loss after the end of the reporting period (Accounting simplified, 2017). This transaction would be termed as an investment. The company would be making an investment after paying cash to Prawn ltd. The investment is quoted at the fair value by the company. The future investment due to the reason that the same would be purchased in august, 2016 but the reporting date of the same is June 30, 2016, hence, the transaction would not be termed as an adjusting event. Hence, this is a non-adjusting event. Also, the conditions that existed on August 26, 2016 were not indicative of any new conditions. On August 5, 2016 the company approved the sale of its fishing business. This would be termed as a non-adjusting event since the going concern assumption of the company is not threatened and also, no conditions of the same existed as on June 30, 2016 which is the reporting period of the companys financial statements. Hence, it is a non-adjusting event. This would be a non-adjusting event since the invoice has been received in respect of the goods that were received in the month of June and were also included in the closing inventory of the company. Hence, this would be termed as an adjusting event. Hence, this is a non-adjusting event. The company had to pay the fine for not filing its income tax return and the company had already included the amount of the fine in its financial statements. The conditions for the same existed as on the date of the reporting date. Hence, this would be termed as an adjusting event. The following are the accounting journal entries that would be passed: 2015 Particulars Debit Credit Aug-20 Bank 72,00,000.00 Share application 72,00,000.00 (being share application money received) Aug-31 Share application 71,85,000.00 Commission 15,000.00 Share capital 72,00,000.00 (being the conversion into share capital) Sep-30 Bank 57,60,000.00 Share capital 57,60,000.00 (being the receipt of the allotment money) Nov-30 Bank 61,10,000.00 Share capital 61,10,000.00 (being the receipt of the call money) Dec-15 Share capital 6,38,000.00 Share issue costs 2,000.00 Shares forfeited 3,60,000.00 Share allotment 1,50,000.00 Share first call 1,30,000.00 (being the issue of the shares forfeited) References: Accounting-simplified.com. (2017).IAS 10 Events after the Reporting Period (Balance Sheet Date). [online] Available at: https://accounting-simplified.com/standard/ias-10-events-after-the-reporting-period/ [Accessed 13 May 2017]. Iasplus.com. (2017).IAS 10 Events After the Reporting Period. [online] Available at: https://www.iasplus.com/en/standards/ias/ias10 [Accessed 13 May 2017].