In the case of a non-adjusting event,IAS 10 requires it to be:
A)reflected in the financial information in the statements if it is material and relates to an item that would normally be reflected in the financial statements.
B)disclosed by way of note if it is material.
C)disclosed as a contingent liability, if an unfavourable material event.
D)reflected in the financial statements, if an unfavourable material event; disclosed by way of note, if a favourable event.

Question

Quizplus · Accepted Answer

IAS 10 requires non-adjusting events to be disclosed by way of note if they are material, even if they relate to an item that would normally be reflected in the financial statements. Option A is incorrect because non-adjusting events cannot be reflected in the financial statements. Option C is incorrect because contingent liabilities are only recognized if they meet specific recognition criteria, and non-adjusting events do not meet those criteria. Option D is incorrect because the materiality and favourability of an event do not affect the disclosure requirements for non-adjusting events.

In the Case of a Non-Adjusting Event,IAS 10 Requires It