Your client's balance sheet date is 30/6/2012, the audit report date is 15/9/2012 and the financial statements and audit report are issued 30/9/2012. Your client suffers a material loss due to an uninsured loss of inventory as a result of fire that occurred 5/7/2012. This event warrants footnote disclosure in, but not an adjustment to, the 30/6/2012 financial statements.

Question

Quizplus · Accepted Answer

The loss occurred after the balance sheet date, so it does not require an adjustment to the financial statements. However, it should be disclosed in a footnote to provide relevant information to the users of the financial statements.

Your Client's Balance Sheet Date Is 30/6/2012, the Audit Report