Question

A fire destroyed a warehouse on 15 April, after year-end

Q: Answer-A fire destroyed a warehouse on 15 April, after year-end 31 March but before statements were authori...

Fire occurred after year-end and did not relate to conditions existing at 31 March. Hence it is a non-adjusting event disclose if material, but no adjustment.

31 March but before statements were authorised. Insurance claim will cover most losses. Should this be adjusted in the 31 March accounts?

A Adjust as it provides evidence of condition at year-end.

B Do not adjust; disclose as material non-adjusting event.

C Recognise insurance proceeds as receivable in March accounts.

D No disclosure needed since insured.

E Adjust only if material to users’ decisions.

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A fire destroyed a warehouse on 15 April, after year-end

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