In the Case of a Non-Adjusting Event,AASB 110 Requires It

question 24

Multiple Choice

In the case of a non-adjusting event,AASB 110 requires it to be:

• A) Reflected in the financial information in the statements if it is material and relates to an item that would normally be reflected in the financial statements.
• B) Disclosed by way of note if it is material.
• C) If an unfavourable material event, disclosed as a contingent liability.
• D) If an unfavourable material event, reflected in the financial statements; if a favourable event, disclosed by way of note.
• E) None of the given answers.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead allocated to produced goods, based on the standard variable overhead rate.

Direct Materials Purchases Variance

The difference between the actual cost of direct material purchases and the expected (or standard) cost, adjusted for volume purchased.

Standard Costs

Predetermined costs for materials, labor, and overhead used in budgeting and assessing performance.

Labor Efficiency Variance

A measure of the difference between the actual hours worked by employees and the standard hours expected to complete a task, used to assess labor productivity.