ACCA AA Syllabus E. Review And Reporting - Adjusting Events - Notes ^{3 / 4}

The basic difference is..

(and yes I know it's obvious you amoooosing monkey head, but I don't make this syllabus up!)

• Adjusting
  Events which require the FS to be adjusted to provide a ‘true and fair view’

• Non-Adjusting
  Events which do not require the FS to be adjusted to provide a ‘true and fair view’

Adjusting Events

1. These provide additional evidence relating to conditions existing at the balance sheet date

2. An example is:

   Inventory sold after the year end below cost
   This provides evidence that the valuation of inventory at the Y/E was incorrect.

3. The financial statements should be adjusted

Non-Adjusting Events

1. These are events which are not adjusting :)))

2. An example of a non-adjusting event is:

   • A fire which destroys inventory after the balance sheet date
     This does not provide evidence of conditions existing at the Y/E, but will still need disclosing (not adjusting) if material

3. These events should be disclosed in the financial statements