Subseqent events again :(

Glynis
Glynis Registered Posts: 488 Dedicated contributor 🦉
edited 11:34AM in AAT member discussion
I need to get some help as this topic is driving me insane.
I have re read this article by Steve Collins for the hundredth time http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012s/sa_apr11_f8_subs_events.pdf
and cannot for the life of me understand why you would adjust the legal proceedings. Surely if a judge found you guilty after the year end you would include the fees in the next years accounts?
Can someone help me understand this please?

Comments

  • Glynis
    Glynis Registered Posts: 488 Dedicated contributor 🦉
    Also do we really have to give the amount of detail that this article goes into in our answer? It's far too much.
  • Bluewednesday
    Bluewednesday Registered Posts: 1,609 Beyond epic contributor 🧙‍♂️
    Regarding the legal proceedings, the article has told you why you should make that provision. You will find in one of the books a really good flow diagram that you need to learn about how and when to make provisions.
  • Glynis
    Glynis Registered Posts: 488 Dedicated contributor 🦉
    I just don't understand the concept behind it all. I Think that if a judge says you owe so much after the year end then why should you put the amount in the year end accounts as I believe you should not recognise future costs in past year accounts??

    Also is it worth reading Lisa Weaver audit articles for F8? I know it's P7 but should I be looking at those also as there are a number of then.
  • Gem7321
    Gem7321 Registered Posts: 1,412 Beyond epic contributor 🧙‍♂️
    Because the costs relate to an event that was initiated before the year end
  • Julia
    Julia Registered Posts: 78 Regular contributor ⭐
    Glynis, Gem7321 is correct it's because the event started in the previous period so the costs have to be matched to that period.

    I would not advise you to read Lisa Weaver's articles because they are purely P7 and you do not want to be confusing yourself with P7 concepts. I have now left BPP but up to last sitting we were advising students to focus on the assessor articles ( Steve Collings is F8 assessor) and the examiner articles (Pami Bahl). These are also flagged up in the BPP text books as recommended reading so you completely must understand them for F8 as the examiner and their assessor work closely together. Only read P7 articles when you get to P7, not before!

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