IAS 10

• IAS 10 Events after the Reporting Period

  Standard that prescribes when an entity should adjust its financial statements for events after the reporting period and the disclosures that an entity should give about the date when the financial statements were authorised for issue and about events after the reporting period
• IAS 10 Events After the Balance Sheet Date originally issued by the International Accounting Standards Committee


  May 1999
• IAS 10 Contingencies and Events Occurring After the Balance Sheet Date issued

  June 1978
• IAS 37 Provisions and Contingent Assets and Contingent Liabilities issued

  1998
• Revised IAS 10 Events after the Balance Sheet Date issued by the International Accounting Standards Board


  December 2003
• Title of IAS 10 changed to Events after the Reporting Period due to changes in terminology made by IAS 1 Presentation of Financial Statements

  2007
• IFRS 13 Fair Value Measurement issued, making minor consequential amendments to IAS 10


  May 2011
• IFRS 9 Financial Instruments issued, making minor consequential amendments to IAS 10

  July 2014
• Definition of Material (Amendments to IAS 1 and IAS 8) issued, making minor consequential amendments to IAS 10

  October 2018
• Events after the reporting period


  Events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue
• Adjusting events after the reporting period

  Events that provide evidence of conditions that existed at the end of the reporting period
• Non-adjusting events after the reporting period


  Events that are indicative of conditions that arose after the reporting period
• Date of authorisation for issue


  The date when the financial statements are authorised for issue, which varies depending on the management structure, statutory requirements and procedures followed
• Authorisation for issue process

  1. Management completes draft financial statements

  2. Board of directors reviews and authorises for issue

  3. Financial statements made available to shareholders and others

  4. Shareholders approve the financial statements at their annual meeting

  5. Approved financial statements filed with a regulatory body
• Events after the reporting period include all events up to the date when the financial statements are authorised for issue, even if those events occur after the public announcement of profit or of other selected financial information
• Adjusting events after the reporting period

  Entity shall adjust the amounts recognised in its financial statements to reflect adjusting events
• Adjusting events after the reporting period

  • Settlement of a court case that confirms the entity had a present obligation at the end of the reporting period
  • Receipt of information indicating an asset was impaired at the end of the reporting period
  • Determination of the cost of assets purchased or proceeds from assets sold before the end of the reporting period
  • Determination of profit-sharing or bonus payments if the entity had a present obligation at the end of the reporting period
  • Discovery of fraud or errors that show the financial statements are incorrect
• Non-adjusting events after the reporting period

  Entity shall not adjust the amounts recognised in its financial statements to reflect non-adjusting events
• Dividends


  If an entity declares dividends to holders of equity instruments after the reporting period, it shall not recognise those dividends as a liability at the end of the reporting period
• An entity shall not adjust the amounts recognised in its financial statements to reflect non-adjusting events after the reporting period
• The decline in fair value does not normally relate to the condition of the investments at the end of the reporting period, but reflects circumstances that have arisen subsequently
• An entity does not adjust the amounts recognised in its financial statements for the investments
• An entity does not update the amounts disclosed for the investments as at the end of the reporting period, although it may need to give additional disclosure
• Dividends


  If an entity declares dividends to holders of equity instruments after the reporting period, the entity shall not recognise those dividends as a liability at the end of the reporting period
• If dividends are declared after the reporting period but before the financial statements are authorised for issue, the dividends are not recognised as a liability at the end of the reporting period because no obligation exists at that time
• Such dividends are disclosed in the notes in accordance with IAS 1 Presentation of Financial Statements
• Going concern


  An entity shall not prepare its financial statements on a going concern basis if management determines after 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
• Deterioration in operating results and financial position after the reporting period may indicate a need to consider whether the going concern assumption is still appropriate
• If the going concern assumption is no longer appropriate, the effect is so pervasive that this Standard requires a fundamental change in the basis of accounting, rather than an adjustment to the amounts recognised within the original basis of accounting
• IAS 1 specifies required disclosures if the financial statements are not prepared on a going concern basis or if management is aware of material uncertainties related to events or conditions that may cast significant doubt upon the entity's ability to continue as a going concern
• Date of authorisation for issue


  An entity shall disclose the date when the financial statements were authorised for issue and who gave that authorisation
• If the entity's owners or others have the power to amend the financial statements after issue, the entity shall disclose that fact
• It is important for users to know when the financial statements were authorised for issue, because the financial statements do not reflect events after this date
• If an entity receives information after the reporting period about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions, in the light of the new information
• Non-adjusting events after the reporting period

  If non-adjusting events after the reporting period are material, non-disclosure could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements
• An entity shall disclose the nature of the event and an estimate of its financial effect, or a statement that such an estimate cannot be made, for each material category of non-adjusting event after the reporting period
• Examples of non-adjusting events after the reporting period

  • Major business combination
  • Announcing a plan to discontinue an operation
  • Major purchases of assets
  • Destruction of a major production plant
  • Announcing or commencing a major restructuring
  • Major ordinary share transactions
  • Abnormally large changes in asset prices or foreign exchange rates
  • Changes in tax rates or tax laws
  • Entering into significant commitments or contingent liabilities
  • Commencing major litigation
• An entity shall apply this Standard for annual periods beginning on or after 1 January 2005
• IFRS 13 Fair Value Measurement, issued in May 2011, amended paragraph 11
• IFRS 9 Financial Instruments, as issued in July 2014, amended paragraph 9