XYZ Manufacturing Company, a well-established player in the automotive components industry, has been a key contributor to the sector for over two decades. Recognizing the need for strategic expansion and diversification, the company embarked on a journey to enter new markets and enhance its product portfolio.

Market Expansion: In pursuit of global market expansion, XYZ Manufacturing Company identified emerging markets in Asia as lucrative opportunities. The company invested in establishing manufacturing facilities and distribution networks in these regions, aiming to capitalize on the growing demand for automotive components.

Product Diversification: To mitigate risks associated with market fluctuations, XYZ Manufacturing Company decided to diversify its product offerings. The company ventured into the production of electric vehicle components, anticipating the future shift towards sustainable transportation. This strategic move aimed to position XYZ Manufacturing Company as an industry leader in the evolving automotive landscape.

Financial Challenges: While the strategic expansion and product diversification initiatives held promising potential, XYZ Manufacturing Company faced unforeseen financial challenges. The initial setup costs for the new manufacturing facilities exceeded projections, impacting short-term liquidity. Additionally, fluctuations in raw material prices and unexpected regulatory changes added complexity to the financial landscape.

Financial Restructuring: To address the financial challenges, XYZ Manufacturing Company initiated a comprehensive financial restructuring plan. This included negotiating terms with creditors, optimizing inventory management, and exploring strategic partnerships to share the burden of expansion costs. The company's leadership remained committed to ensuring the long-term sustainability of the business despite the short-term financial setbacks.

Accounting Adjustments: As part of the financial restructuring, XYZ Manufacturing Company had to make accounting adjustments to accurately reflect the company's financial position. This involved reassessing the valuation of assets, revising depreciation schedules for new equipment, and evaluating the impact of restructuring on the company's financial statements.

Question: Considering the financial restructuring and accounting adjustments made by XYZ Manufacturing Company, discuss how these changes might impact the fundamental accounting equation. Provide insights into the specific adjustments made and their implications for assets, liabilities, and equity.