Chapter 5 - IAS 10 - Events after the Reporting Period

Question 1

• Adjusting Events

Answer 1

*Provide evidence of conditions that existed at the end of the reporting period.

Where the SPL/SFP must be adjusted and maybe disclosures made in the notes to the financial statements

Question 2

• Non-Adjusting Events

Answer 2

*Indicative of conditions that arose after the end of the reporting period

Where no adjustment is made to the primary financial statements, but disclosures may still be required

Question 3

Disclosure required in the notes:

Answer 3

A) The nature of the event; and

B) An estimate of its financial effect or a statement that such an estimate cannot be made

Question 4

If the event provides evidence of conditions existed at the end of the reporting period:

Answer 4

YES:- Adjust the financial statements and consider disclosure in the notes of the financial statements

NO:- Do not adjust the financial statements but make full disclosure in the notes

Question 5

Example of Non Adjusting Event:

Answer 5

Non Adjusting = Should be disclosed if they are of such materiality that not disclosing them would affect the ability of the users of the financial statements to reach a proper understanding of the position of the company.

If the event is material, it should be disclosed within the notes.