Adjustment of events when a company is unaudited for a long

Dear Experts and Friends,

I am having a problem dealing with the following. I humbly request you to put forth some logical suggestions.

 

A company remains un-audited for a long period. Numerous material events happened between the un-audited first year financials date and the year in which the same financials were brought to audit, pertaining to that year, including retrospective revision of law, causing huge liabilities. Are the material events adjustable in the said financials considering AS 4 ? Please explain.

Replies (1)

When you can measure the changes reliably and quantify the same you may treat it as adjusting events and if there is any provision required, this can be duly provided for. Events occuring after the Balance sheet date is upto the date of approval of financials by the Boad of Directors. the standard does not mention the year to which such date pertains to. Hence, you may take into effect the entire changes and incorporate into the financials which can be quantified and apportioned to such years.

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