Events After Reporting Period

Question 1

What standard deals with events after reporting date?

Answer 1

International accounting standard 10 (IAS 10)

Question 2

What are the important things to consider when dealing with events after reporting period?

Answer 2

• Adjusting events
• non-adjusting events
• dividends
• going concern

Question 3

What is an adjusting event and non adjusting event?

Answer 3

Adjusting event - an event that sheds light on a situation evident at reporting date which requires adjustments to financial statements

Non-adjusting event - information that comes to light about situations that only exist after reporting date which requires adjustments to financial statements, but won’t be adjusted because it’s after the reporting date

Question 4

Are they any exceptions to IAS 10 non-adjusting events? Where the situation was not at hand at reporting date

Answer 4

Yes
- if an entity declares dividends to EQUITY HOLDERS after reporting date, we will still never record it
- If the going concern basis of reporting was incorrect or questionable, the statements must always be adjusted to reflect this information

Question 5

How would you approach a IAS 10 question?

Answer 5

• discuss what accounting should be performed due to the new information
• discuss whether it is an adjusting event or not