Longfellow Ltd.'s financial year ended on 30 June 2020. The following events occurred between the end of the reporting period and the date the directors of Longfellow Ltd expect to authorize the financial statements for issue:

i). On 5 August 2020, directors proposed a final dividend of $120 000 which requires approval at the annual general meeting.

ii). On 22 July 2020, the financial cost of inventory shipped from overseas is determined. The inventory was received in June 2020 and the cost was estimated for accounting purposes. The revised cost is $440 000 greater than the prior estimate.

iii). On 16 July 2020, the Remuneration Committee determined the CEO’s bonus for the year ended 30 June 2020 as $500 000; the CEO is entitled to an annual bonus based on company profits as determined by the Remuneration Committee. No accrual has been made.

REQUIRED

For each of the above material after-reporting-period events, state whether adjustment or disclosure is required in the 30 June 2020 financial statements. Assume the above events would not significantly affect the going-concern assumption for Longfellow Ltd. You are not required to draft any financial statement notes or provide any journal entries for adjustments.

Answer rating: 100% (QA)

On 25th July Proposed dividend Dividend Proposed by the Board of directors is not an Adjusting events As there is no further evidence of conditions that existed at the end of the reporting period as per IAS 10 Disclosure of such proposed dividend is necessary as it may affect the decision of the user On 15th July Revision of Inventory Cost Revision of Inventory which was received within the end of the financial statement date is a non adjusting event ... View the full answer