Dear Sir…… A fire broke out on 15 May 2018 in which material Worth 50 lakhs which was lying in inventory since 1 March 2018 was totally destroyed. FST of company have not been adopted till the date of fire…… Whether provision for loss required in F.Y. 2017-18 and if not then why????

1 answer

Ravi Staff August 10, 2018

As per AS-4 subsequent event should be adjusted if

  1. Required by LAW / AS (Example Earlier Proposed Dividend)
  2. Affects Going Concern
  3. Clarifies Contingency Which Was Existing on Balance Sheet Date

Fire happened after year end, it is not clarifying any uncertainty / contingency “existing” on balance sheet date, so it wont be accounted (PM Question)

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