IAS 10 – EVENTS AFTER THE REPORTING PERIOD

Events after the reporting period = Events occurred between the reporting date and authorization date

Reporting date =Financial year end

Authorization date = When BOD approves FS i.e., when issued to shareholders 21 days before AGM

Two types of events = Adjustable events + Non-adjustable events

Adjustable events = Evidence of conditions existed at the reporting date

Non-adjustable events = Indicative of conditions that arose after the reporting date

Recognition and Measurement

Adjustable events = Amounts adjusted at the reporting date

Examples

1. Settlement of a court case after reporting date for which provision was already booked
2. Bankruptcy of a customer existed at the reporting date
3. Write down of inventories existed at the reporting date
4. Purchase cost / sale proceeds confirmed for asset purchased / sold before reporting date
5. Amount of profit-sharing or bonus payments if there is legal or constructive obligation
6. Discovery of Fraud or error
7. Going concern assumption

Non-adjustable events = Amounts not adjusted at the reporting date. Only disclosed if material.

Examples

1. Dividends
2. Business combination
3. Discontinued operations
4. Held for sale assets
5. Natural calamities
6. Shares transactions (Note: EPS shall be adjusted in case of Bonus issue, capitalization, splits)
7. Abnormally large fluctuations in prices or exchange rates
8. New tax rates / contracts / litigations

Disclosure

Date of authorization for issue + Update information about contingencies & commitments + Nature and
amount of non-adjusting event

PAST PAPER ANALYSIS

Extensively tested in FAR-II exams along with IAS 37. Not separately tested at AAFR exams.