Page 251 - F1 Integrated Workbook STUDENT 2018

IAS 2, 8, 10, 34 and IIFRS 8

Exxampple 6

Shoortly after tthe reportinng date, 311/12/X0, a major creddit customeer of an enntity
wennt into liquiidation andd it is expeected that liittle or nonne of $12,0000 debt will
be rrecoverablle. $10,0000 of the deebt relates tto sales made beforee the year
endd.

In thhe 20X0 financial staatements thhe whole oof the debt has been written offf but
onee of the direectors has pointed ouut that, as the liquidaation is an event after
the reporting ddate, the ddebt shouldd not have been writtten off but disclosuree
madde by a noote.

Advvise whethher the dirrector is ccorrect.

Sollution

Thee liquidation of the cuustomer is treated as an adjusting event. Only $10,0000
debbt existed aat the reporting date.

Undder IAS 100 only the eexisting deb bt should bbe written ooff in the 220X0 financcial
stattements. TThe remaining $2,0000 did not exxist at the reporting ddate and
shoould be writtten off in tthe 20X1 fiinancial staatements.

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