Page 85 - IC26 LIFE INSURANCE FINANCE

Two types of events can be identified:

Adjusting Event:

Those, which provide further evidence of conditions that, existed at the balance sheet date

Actual adjustments in financial statements are required for adjusting event.

Exceptions:

1] Although, not adjusting event, Proposed dividend are adjusted in books of account.

2] Adjustments are required for the events, which occur after balance sheet date that indicates that

fundamental accounting assumption of going concern is no longer, appropriate.

Non-Adjusting Events:

 Those, hitch are indicative of conditions that arose subsequent to the balance sheet date.

 No adjustments are required to be made for such events. But, disclosures should be made in the

report of the approving authority of those events occurring after the balance sheet date that

represent material changes and commitments affecting the financial position of the enterprise.

Such disclosure should provide following information:

 The nature of the events

 An estimate of the financial effect, or a statement that such an estimate cannot be made.

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