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After the year end a substantial quantity of inventory wasdestroyed in a fire. The loss...

After the year end a substantial quantity of inventory was destroyed in a fire. The loss was not adequately covered by insurance. This event is likely n the ability to threat of the business to continue as a going concern. Discuss the matters to be considered in making a decision under IAS 10.

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Expert Solution

IAS 10 says that id after the reporting period any such event occurs that effects the entity's going conncern judgement and other major assumtions then it should be made into account in reporting period.

in the above case loss due to fire is material and has affected the Going concern of the entity. That's why proper disclosure should be made regarding the same and accounting shll be done accordingly.

ekkarill92 answered 2 years ago
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