IAS 10 - Events After Reporting Period

• Events after the reporting period

  Events, both favourable and unfavourable, which occur between the reporting date and the date on which the financial statements are approved for issue by the board of directors
• Types of events after the reporting period

  • Adjusting events
  • Non-adjusting events
• Adjusting events

  Events after the reporting date that provide additional evidence of conditions existing at the reporting date
• Adjusting events

  1. Lead to the adjustment of the financial statements before issuance

  2. Require either: adjustments to amounts already recognised in the financial statements; or recognition of items which did not previously meet the recognition criteria
• Adjusting events

  • Settlement of a court case outstanding at the end of the reporting period
  • Bankruptcy of a customer (recoverability of a debt), requiring adjustment to the amount receivable
  • Proceeds or other evidence concerning the net realisable value of inventories
  • Subsequent determination of the purchase price or of the proceeds of sale of assets purchased or sold before the end of the reporting period
• Non-adjusting events

  Events after the reporting date that concern conditions that arose after the reporting date
• Adjustments to amounts in the financial statements are not made to reflect non-adjusting events
• Where the effect of the non-adjusting event is material, such that non-disclosure could influence users' economic decisions, the following information should be provided in the notes to the financial statements: financial effects and nature
• Non-adjusting events

  • Dividends on equity shares declared after the reporting period
  • A fall in the market value of investments
  • Plans to discontinue operations announced after the reporting period
  • Losses on non-current assets/inventories as a result of a catastrophe (e.g. fire or flood)
  • Major purchases of assets
  • Restructuring announced after financial year-end
• UK GAAP treatment of dividends

  • Equity dividend declared after the year end is not recognised but is disclosed in the notes
  • The dividend is not recognised as a liability but may be presented as a segregated component of retained earnings