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 INTRODUCTION
• Events may occur between the end of the reporting period
and the date when financial statements are authorized for
issue which may present information that should be
considered in the preparation of financial statements

• IPSAS 14 -provides guidance as to which events should lead

to adjustments in the financial statements and which events
shall be disclosed in the notes to financial statements.

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 INTRODUCTION
 The date of authorization for issue is usually taken to be the
date when the board of directors authorizes the issue of
financial statements even if those events occur after :
• The publication of an announcement of the surplus or deficit
• The authorization of the financial statements of a controlled
entity
• Or publication of other selected information relating to the
financial statements

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 EVENTS AFTER THE REPORTING PERIOD

• Events after the end of reporting period may be classified

into two types:
• Adjusting Events - Those events that provide further
evidence about conditions that existed at the end of
reporting period.
• Non-Adjusting Events - Those events that reflect

conditions that arose after the end of reporting period.

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 ADJUSTING EVENTS

 If any events occur after the end of the reporting

period that provide further evidence of conditions
that existed at the end of reporting period (i.e.
Adjusting Events), then the financial statements
must be adjusted accordingly.

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 EXAMPLES OF ADJUSTING EVENTS
1. Settlement of litigation against the entity after the
reporting date, in respect of events that occurred
before the end of reporting period, may provide
evidence of the existence and amount of liability at
the reporting date.
A liability in respect of the litigation may be recorded
in the financial statements if not recognized initially
or the amount of liability may be adjusted in
accordance with IPSAS 19 Provisions, Contingent
Liabilities and Contingent Assets.

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 EXAMPLES OF ADJUSTING EVENTS

2. Declaration of bankruptcy by a long outstanding

receivable after the reporting date may provide evidence
that the receivable was impaired at the reporting date.

Impairment may be recognized in the financial

statements by reducing the amount of receivable to its
recoverable amount, if any.

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 EXAMPLES OF ADJUSTING EVENTS
3. Detection of fraud or errors after the reporting
period may indicate that the financial statements
are misstated.
Financial statements may be adjusted to reflect
accounting for those errors or frauds that relate to
the present or prior reporting periods in accordance
with IPSAS 3 Accounting Policies, Changes in
Accounting Estimates and Errors.

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 NON-ADJUSTING EVENTS

 Entity shall not adjust the financial statements in

respect of those events after the end of reporting
period that reflect conditions that arose after the
end of reporting period (i.e. Non-Adjusting Events).

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EXAMPLES OF NON-ADJUSTING EVENTS

1. Declaration of dividends after the reporting date does not

indicate existence of liability to pay dividends at the
reporting date and shall not therefore trigger the
recognition of liability in financial statements in
accordance with IPSAS 19 Provisions, Contingent
Liabilities and Contingent Assets

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 EXAMPLES OF NON-ADJUSTING EVENTS

2. Destruction of assets of the entity by floods

occurring after the reporting period does not
indicate that the assets of the entity were impaired
at the end of reporting period. Hence, the financial
statements should not be adjusted to account for
the impairment loss that arose after the end of
reporting period.

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 NON ADJUSTING EVENTS
• The nature and estimate of the financial impact
of material non-adjusting events shall be disclosed in
the financial statements.
Examples :
 Initiation of a major litigation against the company
arising out of events that occurred after the reporting
period.
 Major losses suffered as a result of a natural disaster
occurring after the end of reporting period.

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