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CA Final · Financial Reporting · Ind AS 10 Events after the Reporting Period

Tara Retail Ltd has a reporting date of 31 March 2026, and its financial statements were approved by the Board on 18 May 2026. Which of the following events occurring between these dates is a non-adjusting event that would generally result in disclosure?

The announcement of a major restructuring after the reporting period is a non-adjusting event that is generally disclosed. The other events give evidence of conditions existing at the reporting date, such as net realisable value, fraud or errors, and bonus obligations, so they are adjusting.

  1. ASale of inventory at below cost, which gives evidence of net realisable value at 31 March 2026
  2. BDiscovery of a fraud that shows the financial statements were incorrect
  3. CAnnouncement of a major restructuring on 5 May 2026Correct
  4. DDetermination of the bonus payable under a constructive obligation that existed at 31 March 2026

Explanation

Announcing, or commencing the implementation of, a major restructuring is listed as a non-adjusting event. The other options are adjusting events: sale of inventory gives evidence of net realisable value, fraud or errors show the statements are incorrect, and bonus determination for an obligation existing at the reporting date requires adjustment.

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