5.5 Accounting for events after the reporting period

Question 1

What is the purpose of IAS10?

Answer 1

Provide guidance on accounting for events that occur after the reporting period but before the publication of the financial statements.

Question 2

What are the two types of post-period events that can be published under IAS10?

Answer 2

1 Adjusting events

2 Non-adjusting events

Question 3

What is an “adjusting event”?

Answer 3

An adjustment is made to the financial statements because the condition existed at the end of the reporting period.

Question 4

What is a “non-adjusting event”?

Answer 4

Events that occurred after the reporting period, and therefore no adjustment is made to the financial statements.

Question 5

What disclosures must be made for material non-adjusting events?

Answer 5

1 Details of the nature of the event

2 An estimate of its financial effect, or a statement that such an estimate cannot be made.

Question 6

What should the entity do (or not do) if a post-reporting period event affects the going concern status of the entity?

Answer 6

The entity should not prepare financial statements on the going concern basis.