Karingai Co Plc Has Been Experiencing Cash Flow Difficulties and Sought

question 15

Multiple Choice

Karingai Co Plc has been experiencing cash flow difficulties and sought a long-term loan from a merchant bank to enable it to restructure its financing from short-term to long-term debt.The loan has been approved by the bank after reporting date and the funds are expected to be received before the time of completion of the accounts.How should this event be reported according to IAS 10?

• A)If the loan is material and the effect on the future financial performance of the entity is significant, IAS 10 requires the directors to disclose the event in the Director's Report and incorporate it into the financial statements.
• B)The directors are required to disclose the event in the Statement of Directors' Responsibilities.
• C)No note disclosure is required in this case.
• D)The even should be disclosed in a note, the fact that it occurred after reporting date and its financial effect on the company should be provided.

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