IAS 10 - Events after the Reporting Period

Question 1

events after the reporting period

Answer 1

Favourable and unfavourable events which occur between the SOFP date and the date on which the financial statements are authorised for issue to interested parties

Question 2

adjusting events

Answer 2

• Provide further evidence of conditions existing at the reporting date.
• The financial statements must be adjusted to reflect these events
• Examples: remember “SBIID”
• Settlement post year-end of court case
• Bankruptcy post year-end of a credit customer
• Impairment post year-end of assets
• Inventories, where net realisable value falls below cost price
• Discovery of fraud/error that confirm the financial statements were incorrect

Question 3

non-adjusting events

Answer 3

• Provide no additional evidence about the conditions that existed at the reporting date.
• If material, these events are merely disclosed by a note in the financial statements
• Examples: remember “MRTPLD”
• Mergers and acquisitions
• Reconstructions
• The issue of shares/debentures
• Purchase/sale of non-current assets or investments
• Loss of assets as a result of a catastrophe after the year end
• Dividends proposed after the reporting date