REPORTING FINANCIAL PERFORMANCE

SESSION 16
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

 IAS 10 defines events occurring after the reporting date.

 IAS 10 (Revised) Events after the reporting date requires the provision of additional
information in order to facilitate such an understanding.

 IAS 10 deals with events after the balance sheet date which may affect the position at the
balance sheet date.
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

 Events after the reporting date are those events, both favourable and unfavourable,
that occur between the reporting date and the date on which the financial
statements are authorised for issue.

 Two types of events can be identified:

 Those that provide further evidence of conditions that existed at the reporting date; and

 Those that are indicative of conditions that arose subsequent to the reporting date.
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

 Events requiring adjustment

Events after the reporting date which provide additional evidence of conditions existing at
the reporting date, will cause adjustments to be made to the assets and liabilities in the
financial statements.

An example of additional evidence which becomes available after the reporting date is
where a customer goes bankrupt, thus confirming that the trade account receivable
balance at the year end is uncollectable.
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

 Events not requiring adjustment

Events which do not affect the situation at the reporting date should not be adjusted for, but
should be disclosed in the financial statements.

However, if this non-adjusting event does not have any material impact on the financial
statements of the entity, then it is just ignored.
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

 Exception – Dividends

Dividends announced by the enterprise after the balance sheet date are a special case.

Dividends stated to be in respect of the period covered by the financial statements and that
are proposed or declared after the balance sheet date but before approval of the financial
statements should not be recognised as a liability but disclosed as a note to the financial
statements.
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

 Disclosures:
The following disclosure requirements are given for events which occur after the reporting
date which do not require adjustment. If disclosure of events occurring after the reporting
date is required by this standard, the following information should be provided:

(a) The nature of the event

(b) An estimate of the financial effect, or a statement that such an estimate cannot be
made
 IAS 10 (REVISED) EVENTS AFTER THE REPORTING DATE

Adjusting or non-adjusting:
 Purchase of an investment
 A change in the rate of tax, applicable to the previous year
 An increase in pension benefits
 Losses due to fire
 A bad debt suddenly being paid
 The receipt of proceeds of sales or other evidence concerning the net realisable value of
inventory
 A sudden decline in the value of property held as a long-term asset