PAS 10

EVENTS AFTER THE
REPORTING PERIOD
 EVENTS AFTER THE REPORTING
PERIOD
Those events, whether favorable or
unfavorable, thta occur between the end
of the reporting period and the date on
which the financial statements are
authorized for issue
 TYPES OF EVENTS AFTER THE
REPORTING PERIOD
ADJUSTING EVENTS ­ provide evidence of
conditions that exist at the end of the reporting
period
NONADJUSTING EVENTS ­ those that are
indicative of conditions that arise after the end
of reporting period
­disclosure nature and effects (significant)
 EXAMPLES OF ADJUSTING EVENTS
• Settlement after the reporting period of a
court case because it confirms that the entity
already had a present obligation at the end of
reporting obligation
• Bankruptcy of a customer which occurs after
the reporting period
• Sale of inventories after the reporting period
may give evidence about the net realizable
value at reporting date
 EXAMPLES OF ADJUSTING EVENTS
• Determination after the reporting period of
the cost of asset purchased or the proceeds
from asset sold before the end of reporting
period
• Determination after the reporting period of
the profit sharing or bonus payment if the
entity has the present obligation at the end of
reporting period to make such payment
• Discovery of fraud or errors that show the FS
EXAMPLES OF NONADJUSTING EVENTS
• Business combination after the reporting
period
• Plan to discontinue an operation
• Major purchase and disposal of asset or
expropriation of major asset by government
• Destruction of a major production plant by
fire after the reporting period
EXAMPLES OF NONADJUSTING EVENTS
• Major ordinary share transactions and
potential ordinary share transactions after the
reporting period
• Announcing or commencing the
implementation of a major restructuring
• Abnormally large changes after the reporting
period in asset prices or foreign exchange
rates
EXAMPLES OF NONADJUSTING EVENTS
• Entering into significant commitments or
contingent liabilities, for example, by issuing
gurantees
• Commencing major litigation arising solely from
events that occured after the reporting period
• Change in tax rate enacted or announced after the
end of reporting period that has a significant effect
on current and deferred tax asset and liability
FINANCIAL STATEMENTS AUTHORIZED
FOR ISSUE
When the board of directors reviews the financial
statements and authorizes the issue

An entity is required to submit the FS to the
shareholders for approval after the FS have been
issued in some cases. Therefore, the FS are
authorized for issue on the date of issue by the
board of directors and not on the date of approval.
Problem 13­1 Answers

1. Allowance for doubtful accounts  100,000
Accounts Receivables 100,000
2. No effect to December 31, 2019
3. Loss 525,000
Insurance Receivable 400,000
Equipment 125,000
13­3

1. C
2. A
3. A
4. A
13­4

1. D
2. C
3. D
4. D
5. D
13­5

1. B
2. D
3. D
4. C
5. B