Surya Limited follows the financial year from April to March. It has provided the following information. A suit against the Company's Advertisement…

Accordingly, the treatment as per AS 4 “Events Occurring After the Balance Sheet Date" is: Suit filed against the company is a contingent liability, but it was not existing as on date of balance sheet date as the suit was filed on 5 th April after the balance sheet date. As per AS 4, 'Contingencies' is restricted to conditions or situations at the balance sheet date, the financial effect of which is to be determined by future events which may or may not occur. However, it may be disclosed with the nature of contingency, being a contingent liability. This event does not pertain to conditions on the balance sheet date. Hence, it will have no effect on the financial statement and will be a non-adjusting event.In this case, no adjustment to assets and liabilities is required as the event does not affect the determination and the condition of the amounts stated in the financial statements for the year ended 31 st March, 2023. There was just a proposal before 31 st March, 2023 and hence sale cannot be shown in the financial statements for the year ended 31 st March, 2023. Sale of immovable property is an event occurring after the balance sheet date is a non-adjusting event.