While preparing its financial statements for the year ended 31 st March, 2025, B Limited has come across the following events which took place after…

AS 4 (Revised) defines Events Occurring after the Balance Sheet Date" as those significant events, both favourable and unfavourable, that occur between the balance sheet date and the date on which the financial statements are approved by the Approving Authority in the case of a company. Accordingly, The acquisition of Consumer Durables Business of S Limited by B Limited is an event occurring after the balance sheet date. However, it is a non-adjusting event as it does not affect the determination and the condition of the amounts stated in the financial statements for the year ended 31 st March, 2025. The disclosure should be made in the report of the approving authority about the investment of 275lakhs to enable the users of financial statements to make proper evaluations and decisions.This is an adjusting event. If a fraud of the accounting period is detected after the balance sheet date but before approval of the financial statements, it is necessary to recognize the loss of 1,25,000 and adjust the accounts of the company for the year ended 31 st March, 2025.This is a non-adjusting event. The destruction of warehouse due to fire did not exist on the balance sheet date i.e. 31 st March, 2025. Therefore, loss occurred due to fire is not to be recognized in the financial year 2024-25. Considering that the going concern assumption is still valid, the fact of fire together with a loss of 15lakhs should be disclosed in the report of the approving authority for 2024-25 to enable the users of financial statements to make proper evaluations and decisions.