AASB 110 Refers to Subsequent Events That Relate to Conditions

question 21

Multiple Choice

AASB 110 refers to subsequent events that relate to conditions that have arisen after the reporting date. Such events, if they could influence decision making:

• A)must be disclosed in a footnote to the financial statements.
• B)need not be accounted for.
• C)must be referred to in a special mail- out to shareholders.
• D)require adjustments to the figures in the financial statements.

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Definitions:

Earnings Before Taxes

The income a company generates before taking into account the income tax expense.

Sales Price

The amount a buyer pays to purchase a product or service.

Net Present Value

The current value of an investment's projected earnings, discounted at an appropriate interest rate, minus the initial capital cost.

Required Rate

The lowest return an investor is willing to accept on an investment to deem it as profitable.