The purpose of IAS 10 Events after the Reporting Period is to determine the treatment of events that arise following the end of an entity's reporting period. Required: Describe the period that concerns IAS 10 and explain the differences between adjusting and non-adjusting events. [6 marks] »Lily Limited's current year end is 28 February 2022. Its financial statements were authorised for issue by its directors on 10 April 2022. The Annual General Meeting (AGM) will be held on 2 May 2022. However, the following issues have been raised: On 24 April 2022 the government announced tax changes that will have an impact of increasing Lily's tax liability at 28 February 2022 by $420,000. [4 marks] On 15 March 2022 a fire destroyed one of Lily's warehouses and the inventory stored within it. The carrying value of the warehouse was $8 million and was $4 million for the inventory. Lily has unfortunately not updated its insurance cover and therefore only expects to recover a maximum of $6 million from its insurers. Consequently, Lily Limited's trading operations have been severely disrupted and it expects to make future losses for some years. [6 marks] Required: Explain how Lily Limited should treat the above items in its financial statements for the year ended 28 February 2022. Assume both items are independent of each other. « Liabilities are one of the elements within the International Accounting Standards Board's Framework for the Preparation and Presentation of Financial Statements. It forms the basis for IAS 37 Provision, Contingent Liabilities and Contingent Assets. Required: Provide a definition for a liability and explain the conditions under which provisions should be recognised. Suitable examples can be included to illustrate your answer. 19 marks]