Exercises - MFRS 110 Events after the Reporting Period

QUESTION 1

The objective of MFRS 110 Events after the Reporting Period is to prescribe when as entity should adjust its financial statement.

Required:

   Explain briefly “events after the end of the reporting period” in accordance with MFRS 110 Events after the Reporting Period.                                                  

 QUESTION 2 

 The financial statements of Rintis Biru Bhd for the year ended 30 June 2018 is authorised for issue on 1 September 2018. The following are events after the reporting period of the company.

       i.       A purchase of goods dated 30 June 2018 amounting to RM120,000 was recorded as sales in July 2018.

      ii.       A major customer with a balance of RM200,000 as at 30 June 2018 was declared bankrupt on 15 August 2018. However, the company managed to get a payment from thee customer amounting to RM20,000 in July 2018.

          Required:

a)     Determine the nature of the above events whether adjusting or non-adjusting by referring to MFRS 110 Events after the Reporting Period.                       

b)     Explain the appropriate accounting treatment for each of the above events in the financial statements of Rintis Biru Bhd as prescribed in MFRS 110 Events after the Reporting Period.