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IAS 10: Events After Reporting Period

IAS 10 outlines the requirements for adjusting financial statements based on events occurring after the reporting period, distinguishing between adjusting events that provide evidence of conditions existing at the reporting period's end and non-adjusting events that arise afterward. It mandates the disclosure of the nature and financial effect of such events, while also stating that financial statements should not be prepared on a going concern basis if management plans to liquidate or cease trading. The standard was reissued in December 2003 and applies to annual periods beginning on or after January 1, 2005.

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8 views3 pages

IAS 10: Events After Reporting Period

IAS 10 outlines the requirements for adjusting financial statements based on events occurring after the reporting period, distinguishing between adjusting events that provide evidence of conditions existing at the reporting period's end and non-adjusting events that arise afterward. It mandates the disclosure of the nature and financial effect of such events, while also stating that financial statements should not be prepared on a going concern basis if management plans to liquidate or cease trading. The standard was reissued in December 2003 and applies to annual periods beginning on or after January 1, 2005.

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sjayceelyn
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© All Rights Reserved
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Events After Reporting Period

Overview

IAS 10 Events After the Reporting Period

 contains requirements for when events after the end of the reporting period should be adjusted
in the financial statements.
 Adjusting events are those providing evidence of conditions existing at the end of the reporting
period, whereas
 Non-adjusting events are indicative of conditions arising after the reporting period (the latter
being disclosed where material).

IAS 10 was reissued in December 2003 and applies to annual periods beginning on or after 1 January
2005.

Objective

When

✔To adjust the FS

Events that occur between the end of the reporting period and the date that the financial statements are
authorized for issue.

What

✓ To disclose

(a) the nature of the event and

(b) an estimate of its financial effect or a statement that a reasonable estimate of the effect cannot be
made. [IAS 10.21]

X No Going Concern

An entity shall not prepare its financial statements on a going concern basis if management determines
after the end of the reporting period either that it intends to liquidate the entity or to cease trading, or
that it has no realistic alternative but to do so. [IAS 10.14]
Adjusting Events Examples

Going concern issues arising after the end of the reporting period

• An entity shall not prepare its financial statements on a going concern basis if management determines
after the end of the reporting period either that it intends to liquidate the entity or to cease trading, or
that it has no realistic alternative but to do so. [IAS 10.14]

Adjusting Events Examples

• Settlement after the reporting period of a court case because it confirms that the entity already had a
present obligation at the end of the reporting period.

• Sale of inventories after the reporting period may give evidence about the net realizable value at the
reporting date.
• The determination after the reporting period of the cost of assets purchased or the proceeds from
assets sold before the end of the reporting period. The discovery of fraud or errors that show the
financial statements were incorrect.

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