IAS 10 — Events After the Reporting Period End

This standard accounts for events which are happening after the financial period end and before the authorisation of financial statements and should be adjusted in the financial statements. There are two types of events. Adjusting events and Non- Adjusting events.

Adjusting events are the events providing evidence of conditions existing at the end of reporting period. While Non-Adjusting events provide evidence of conditions existing after the end of reporting period. Moreover, management should not prepare the financial statements on the going concern basis if management determines after the year end that it intends to sell the company or cease trading.

Adjustment should be done in the financial statements if the events is adjusting and going concern assumption should also be evaluated either it is appropriate or not. While no adjustment should be done for non-adjusting events as it occurs and conditions exists after the period end.

The non-adjusting events should be disclosed in the financial statements if it is material and it is probable that the users of financial statements will not be able to make proper evaluation and decisions. The required disclosure should be for the nature of the event and the estimate of financial effect on the financial statements.

The company must disclose the date of authorisation of financial statements for issue and who authorised the financial statements. If the owner or others have the power to amend the financial statements the company must also disclose it.

Uncategorized
Previous reading
VAT on Samples/Gifts
Next reading
Ratio Analysis
Open chat