Non-adjusting events
In this lesson, you'll learn how to identify and account for non-adjusting events in financial reporting. Non-adjusting events are occurrences that happen after the reporting date and couldn't have been predicted—such as asset destruction, business acquisitions, or litigation commencement.
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In this lesson
- 0:00 Non-adjusting events: definition and key principles
- 0:19 Why non-adjusting events aren't adjusted
- 0:42 Disclosure requirements for non-adjusting events
- 1:36 Common examples of non-adjusting events
About this lesson
Because these events provide evidence of conditions that arose after year-end, they're not adjusted into the current period's financial statements. Instead, you'll discover that while the figures remain unchanged, a disclosure note is required if the event materially affects users' ability to evaluate the financial statements. You'll learn exactly what to disclose: the nature of the event and its estimated financial effect, or a statement that no reasonable estimate can be made. This distinction between adjusting and non-adjusting events is essential for Financial Reporting and Strategic Business Reporting papers, where correct treatment directly impacts exam success.
Duration: 3m
Transcript
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