DFS Journal

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Emilie
Emilie Registered Posts: 37 Regular contributor ⭐
in AAT Level 4 (Level 8 in Scotland)
HI Everyone,

Having a hard time working this journal out.

If there was a fire at the company's premises that destroyed property plant, equipment and inventories. The losses from the fire amounted to £487,000 and they were not covered by the insurance company. This amount is considered by the directors to constitute a material loss to the company.


Can some one please advise the journal.

Thanks,

Emilie

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  • Emilie
    Emilie Registered Posts: 37 Regular contributor ⭐
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    DFS Journal

    If this is not treated as a journal then how would it be treated.
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
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    It is treated as a journal. However there are several stages. I would start with each item that has been destroyed and dispose of them separately starting with the fixed assets (at NBV). The debit entry would be 'fire damage losses' or some other suitable narrative.
  • messedup89
    messedup89 Registered Posts: 1,281 Beyond epic contributor 🧙‍♂️
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    when i did DFS and had a question like this we didnt do a journal for it. We just disclosed it in the notes to the accounts
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    messedup89 wrote: »
    when i did DFS and had a question like this we didnt do a journal for it. We just disclosed it in the notes to the accounts

    Hi,

    I think your question may have related to IAS 10 'Events After the Reporting Date' because if the fire in the OP question had occurred AFTER the reporting date then this would, of course, be a non-adjusting event and as it is a material loss would require disclosure as you quite correctly state. However, if the fire had occurred before the reporting date then it would need accounting for in the financial statements.

    Best wishes
    Steve
  • messedup89
    messedup89 Registered Posts: 1,281 Beyond epic contributor 🧙‍♂️
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    Steve Collings wrote: »
    Hi,

    I think your question may have related to IAS 10 'Events After the Reporting Date' because if the fire in the OP question had occurred AFTER the reporting date then this would, of course, be a non-adjusting event and as it is a material loss would require disclosure as you quite correctly state. However, if the fire had occurred before the reporting date then it would need accounting for in the financial statements.

    Best wishes
    Steve

    sorry i should have specified that. The questions that i had on this were all after the reporting date.

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