Management of Utopia Ltd Has Become Aware After Reporting Date

question 35

Multiple Choice

Management of Utopia Ltd has become aware after reporting date that a major customer is insolvent.The customer apparently went into receivership before Utopia's reporting date and owes Utopia a material amount for inventory purchased during the period.According to AASB 110,how should this event be treated in Utopia's financial statements?

• A) The account receivable should be written off.
• B) The event should be disclosed in the notes to the financial statements, including information about the financial impact of the customer's insolvency.
• C) No reporting about the event is required.
• D) The directors are required to disclose the event in the Directors' Declaration.
• E) None of the given answers.