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Pas 10 Events After Reporting Period

PAS 10 provides guidance on accounting for events that occur after the end of a reporting period but before financial statements are issued. It distinguishes between adjusting events, which provide evidence of conditions that existed at the end of the reporting period, and non-adjusting events, which provide evidence of conditions that arose after the reporting period. Adjusting events require revision to amounts recognized in financial statements, while non-adjusting events require disclosure in the notes to the financial statements only if material. The standard also addresses disclosure requirements for conditions arising after the reporting period and the date financial statements are authorized for issue.

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1K views2 pages

Pas 10 Events After Reporting Period

PAS 10 provides guidance on accounting for events that occur after the end of a reporting period but before financial statements are issued. It distinguishes between adjusting events, which provide evidence of conditions that existed at the end of the reporting period, and non-adjusting events, which provide evidence of conditions that arose after the reporting period. Adjusting events require revision to amounts recognized in financial statements, while non-adjusting events require disclosure in the notes to the financial statements only if material. The standard also addresses disclosure requirements for conditions arising after the reporting period and the date financial statements are authorized for issue.

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ROB101512
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© © All Rights Reserved
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PAS 10 — Events after the Reporting Period

PAS 10 Events after the Reporting Period contains requirements for when events after the end of 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).

Summary of PAS 10

Key definitions

Event after the reporting period: An event, which could be favourable or unfavourable, that occurs
between the end of the reporting period and the date that the financial statements are authorised for
issue.

Adjusting event: An event after the reporting period that provides further evidence of conditions that
existed at the end of the reporting period, including an event that indicates that the going concern
assumption in relation to the whole or part of the enterprise is not appropriate. [IAS 10.3]

Non-adjusting event: An event after the reporting period that is indicative of a condition that arose after
the end of the reporting period. [IAS 10.3]

Accounting
 Adjust financial statements for adjusting events - events after the balance sheet date that
provide further evidence of conditions that existed at the end of the reporting period,
including events that indicate that the going concern assumption in relation to the whole or
part of the enterprise is not appropriate.
 Do not adjust for non-adjusting events - events or conditions that arose after the end of the
reporting period.
 If an entity declares dividends after the reporting period, the entity shall not recognise those
dividends as a liability at the end of the reporting period. That is a non-adjusting event.

Going concern issues arising after 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]

Disclosure

Non-adjusting events should be disclosed if they are of such importance that non-disclosure would
affect the ability of users to make proper evaluations and decisions. The required disclosure is (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.

A company should update disclosures that relate to conditions that existed at the end of the reporting
period to reflect any new information that it receives after the reporting period about those conditions.

Companies must disclose the date when the financial statements were authorised for issue and who
gave that authorisation. If the enterprise's owners or others have the power to amend the financial
statements after issuance, the enterprise must disclose that fact.

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