AASB 110 Specifies That Adjusting Events Should Be Considered Against

question 25

Multiple Choice

AASB 110 specifies that adjusting events should be considered against two criteria to determine their treatment.The two criteria are:

• A) (a) provides an indication that conditions may have existed at balance sheet date; or (b) reveals additional solid evidence of a condition that existed at balance sheet date.
• B) (a) provides additional evidence of conditions that existed at the date the audit report was signed; or (b) reveals for the first time a condition that existed at date of completion.
• C) (a) provides an indication that conditions may have existed at date of completion; or (b) reveals additional solid evidence of a condition that existed at date of completion.
• D) (a) provides additional evidence of conditions that existed at reporting date; or (b) reveals for the first time a condition that existed at reporting date.
• E) None of the given answers.

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Definitions:

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.

Market Interest Rates

The prevailing rate of interest available in the marketplace for securities, loans, and deposits, determined by supply and demand dynamics.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is the nominal value of a security.

Semi-Annual Interest

Interest that is calculated and paid twice a year, commonly found in bonds and certain types of loans.