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(i)
The destruction of the factory after the balance sheet date is a non-adjusting event according to IAS 10 events after the reporting period. Since the going concern of the company is not affected then, the management should make the appropriate disclosures in the financial statements since non-disclosure would affect the ability of users to make proper evaluations and decisions
(ii)
The guarantee made by Kumba does satisfy the conditions as laid out in IAS 37 provisions, contingent assets, contingent liabilities for it to be recognised as a provision. It has been shown that there is a high chance that the liability will fall on Kumba. Therefore, in compliance with IAS 37, the management of Kumba should make a provision in the financial statements.
Wilfykil answered the question on February 13, 2019 at 06:10
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