IAS-10: EVENTS AFTER THE REPORTING PERIOD

Scope
This standard shall be applied for accounting for and disclosure of the events after the
reporting period.

Key Definitions
Event after the reporting period: An event, which could be favorable or unfavorable, that
occurs between the end of the reporting period and the date that the financial statements
are authorized 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.
Non-adjusting event: An event after the reporting period that is indicative of a condition
that arose after the end of the reporting period.

Date of authorization
There may be different date in between BS date and AGM. Authorization date is the date
Mgt authorizes the FS.

Recognition and Measurement
An entity shall adjust the amounts recognized in the financial statement to reflect
adjusting event after the period.
Examples of adjusting events are :
a) A court case that meet the definition of provision as per IAS 37.
b) Bankruptcy of a customer after the reporting period.
c) Do not adjust for non-adjusting events : events or conditions that arose after the
end of the reporting period. For example:
d) If an entity declares dividends after the reporting period, the entity shall not recognize
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.

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 authorized for issue
and who gave that authorization. If the enterprise's owners or others have the power to
amend the financial statements after issuance, the enterprise must disclose that fact.

Some example of events after BS:
. For each of the following material items state whether adjustments or disclosure is
required as per IAS 10 in the 30th June 2008 financial statements. If adjustment is
required state the nature of the adjustments that is the effect on the elements of the
financial statements. In case of disclosure, write down the nature of the disclosure.
Directors approved the financial statements on July 20 and AGM date is August 10.
a) On July 2, 2008 directors proposed a cash dividend of Taka 10,000
b) On 3 July 2008, directors approved the sale of an off-shore agency to another entity at
a profit of Taka 30,000.
c) On 10 July 2008 the companys country warehouse was destroyed by fire. The
carrying value of the warehouse is Taka 300,000.
d) On July10, the final cost of the inventory shipped from the overseas was determined.
The inventory was received during June. The revised cost was Taka 90,000 greater than
the prior estimate.
e) A verdict was given in 15 July in high court in relation to a product liability case
brought by a customer against the company which costs a compensation of Taka 270,000