(b) Subsequent event

Matters:
– Materiality of the asset (calculation) and significance to profit
– Identify event as non-adjusting
– Describe content of note to financial statements
– Consider other costs, e.g. inventories to be written off
– Contingent asset/deferred income should not be recognised

Evidence:
– A copy of any press release/media reports
– Photographic evidence of the site after the natural disaster and of the demolished site
– A copy of the note to the financial statements describing the event
– A schedule of the costs of the demolition, with a sample agreed to supporting documentation
– A schedule showing the value of inventories and items such as fixtures and fittings
– A copy of the insurance claim
– Confirmation of the removal of the contingent asset from the financial statements

Maximum marks 7