Group and treasury share transactions

Chapter 18 – Events After the Reporting Period Page 252 3. Are the statements about the classification of each of the following events after the end of the reporting period but before the financial statements are authorised for issue true or false, according to IAS10 Events after the reporting period? 1 A decline in the market value of investments would normally be classified as an adjusting event. 2 The settlement of a long-running court case would normally be classified as a non-adjusting event. Statement 1 Statement 2 A False False B False True C True False D True True 4. The Citril Companys financial year end was 31 October 20X7. Between the date on which the financial statements for this year were completed and the date on which they were due to be authorised for issue, a number of events took place. According to IAS10 Events after the reporting period, which TWO of the following four events should be classified as non-adjusting events requiring disclosure? A The Citril Company announced the discontinuation of its assembly operation B The Citril Company entered into an agreement to purchase the freehold of its currently leased office buildings C The Citril Company received CU 150,000 in respect of an insurance claim measured in the 31 October 20X7 financial statements at CU90,000 D A mistake was discovered in the calculation of the allowance for uncollectible trade receivables, leading to it being understated in the 31 October 20X7 financial statements by CU220,000 Chapter 18 – Events After the Reporting Period Page 253 5. The Vittex Company is preparing its financial statements for the year to 30 June 20X8. The board of directors reviews the final draft financial statements and authorises them for issue on 8 August 20X8. The earnings figure and key data are issued to the public on 19 September 20X8. The financial statements are issued to shareholders on 6 October 20X8 and approved by shareholders on 10 November 20X8. The period in respect of which the company should consider events after the end of reporting period in accordance with IAS10 Events after the reporting period, is from 30 June 20X8 to A 8 August 20X8 B 19 September 20X8 C 6 October 20X8 D 10 November 20X8 6. The Alsenax Companys financial statements for the year to 31 December 20X7 are to be authorised for issue on 31 March 20X8. The following dividends relate to the year to 31 December 20X7: Proposed by directors Approved by shareholders Paid Interim 29 July 20X7 - 29 August 20X7 Final 14 February 20X8 28 April 20X8 22 May 20X8 Are the following statements about the treatment of these dividends in the companys financial statements for the year to 31 December 20X7 true or false, according to IAS10 Events after the reporting period? 1 The interim dividend should be presented in the statement of changes in equity. 2 The final dividend should be recognised as a liability. Statement 1 Statement 2 A False False B False True C True False D True True