NAS 10 : Events after the

Reporting Period

Nishant Nepal
2080.01.07
Introduction: Events after the Reporting Period

• Events after the reporting period are those events, favourable and
unfavourable, that occur between the end of the reporting period and
the date when the financial statements are authorized for issue.

Date Eve nt
2080.03.31 End of Re porting Pe riod
2080.05.08 Mgmt a uthoris e s FS for is s ue to its Supe rvis ory Boa rd
2080.06.01 Supe rvis ory Boa rd Approve s FS
2080.06.05 Sha re holde rs Approve s FS in AGM

Da te whe n FS a re Authoris e d to is s ue
Two Types of Events can be identified
Adjusting Events after the Non-Adjusting Events
Reporting Period After the Reporting Period

Those events that provide evidence Those events that are indicative of
of condition that existed at the end conditions that arose after the
of the reporting period. reporting period.
Recognition & Measurement
Adjusting Events Non-Adjusting Events

An entity shall adjust the amount An entity shall not adjust the
recognized in its financial amount recognized in its financial
statements to reflect adjusting statements to reflect non-adjusting
events after the reporting period events after the reporting period
Some Examples of Adjusting Events
• The settlement after the reporting period of a court case that confirms
that the entity had a present obligation at the end of the reporting
period.
• The receipt of information after the reporting period indicating that
an asset was impaired at the end of the reporting period.( e.g.
Bankruptcy of Customer after the reporting period usually confirms
that the customer was credit-impaired at the end of the reporting
period, etc)
• The discovery of fraud or errors that show that financial statements
are incorrect.
• Determination of amount of profit sharing or bonus payment after the
reporting period(NAS 19) …….etc
Non-Adjusting Events: Disclosure

If non-adjusting events are material ,non disclosure could influence the

economic decisions that users make on the basis of financial statements.

Accordingly, an entity shall disclose the following for each material

category of non-adjusting event after the reporting period:
a) The nature of the event; and
b) An estimate of its financial effect ,
or a statement that such an estimate cannot be made.
Some Examples of Non-Adjusting Events
• A major business combination or
disposing of major subsidiary;
• Announcing a plan to discontinue
an operation;
• Major purchase of asset,
classification of asset as held for
sale;
• Destruction of major production
plant by fire after reporting
period;
• Abnormally large changes in
assets prices or foreign exchange
rates after reporting period
• Changes in tax rates
• Entering into significant
commitments or contingent
liabilities
• Commencing major litigation
solely out of events that occurred
after the reporting period
Dividends
• If an entity declares dividends to holders of equity instruments after
the reporting period

the entity shall not recognize those dividends as a liability at the

end of the reporting period

Such dividends are disclosed in the notes in accordance with NAS 1

Presentation of Financial Statements
Going Concern
An entity shall not prepare its financial statements on a going concern
basis if management determines after the reporting period
Either that it intends to liquidate the entity or to cease trading
or
That it has no realistic alternative but to do so.

NAS 1 Specifies required disclosures if:

a) the financial statements are not prepared on a going concern
basis; or
b) management is aware of material uncertainties related to events
or conditions that may cast significant doubt upon entity’s ability to
continue as going concern
Open Discussion
Thank You