Main rules of IAS 10. Each of the following events occurred after the reporting date of 31 March 2019, but before the financial statements were authorised for issue. What are Subsequent Events? 1 There are two types of events: (a) events which provide evidence of conditions that existed at the end of the reporting period (adjusting event); and (b) events which are indicative of conditions that arose after the reporting period (non-adjusting event). Events after the reporting period are favorable or unfavorable events that occur between the end of the reporting period and the date of the next annual financial statements. It defines both adjusting and non-adjusting events. Take good notes. UK IFRS/UK FRS 102: Events after the Reporting Period Disclosure Dialog. a) Adjusting events Events which provide evidence of conditions which existed at the end of the reporting period. Commencement of major litigation arising solely out of events that occurred after the end of the reporting period. All costs are provided for. Definition: Events favorable or unfavorable occurred between the end of the reporting period and the date when financial statements are authorized for issue are called Subsequent Events. The date when the financial All effective amendments issued since that date are reflected in the text of the standard. 11 An example of a non-adjusting event after the reporting period is a decline in fair value of investments between the end of the reporting period and the date when the Tout savoir sur l'volution des normes IFRS, votre site internet d'actualit et de veille sur les normes ifrs FRS 21 gives some examples of typical adjusting events at paragraph 9(a) to 9(e), specifically: Settlement of a court case after the balance sheet date which confirms the entity had a liability at the balance sheet date An example of a non-adjusting event after the reporting period is a decline in fair value of investments between the end of the reporting period and the date when the financial statements are authorised for issue. If you want to write a successfu l post-event wrap-up report, follow these helpful professional tips: Schedule time to write and publish the report within 48 hours of the event. IAS 10 Events after the Reporting Period. Launch. IAS 10 takes into account the effects of events that occur after the reporting period and have an influence on the entitys capacity to continue as a going concern. Example 1: settlement of a contingency In the financial statements for the year ended 31 December 20X1, LD Ltd created a provision for damages of $600,000 assuming a 60% probability that it will lose the legal case. The debit would be to the asset itself rather than the income statement. There are two types of events after the reporting period: Adjusting events. Question is what events to adjusted for and what to be left for next accounting period. Subsequent events according to auditing are the events that occur between the date of financial statements i.e. b. The settlement of an insurance claim for a loss sustained in December 2018 As the adjusting events are recognized in the financial statements of the period preceding them, they are also called recognized subsequent events. Effect of events after the reporting period on a right to defer settlement 6. A fiscal year sets the start of the reporting period to any date, and financial data is aggregated for a year after said date. Learn the key accounting principles to be applied when adjusting financial statements for events after the reporting period. IAS 10 Adjusting events are those providing evidence of conditions existing at the end of the reporting period. Events after the balance sheet date are divided into two types, corresponding to the two examples just given. For Example, a company prepares its balance sheet on 31/3/2021, but it is approved by Board of Directors on 30/6/2021. A Practical Guide to UK Accounting and Auditing Standards. Such events are called events after reporting period. These include events that show going concern issues for either for the full or part of the enterprise. Include photos and video or audio recordings; make sure to embed them in the post. Linking to these resources is recommended. IAS 10 Events after the Reporting Period (IAS 10) defines events after the reporting period as those events, favourable and unfavourable, that occur between the end of the reporting period (in this case, 31 December 2019) and the date when the financial statements are authorised for issue. A subsequent event is an event that occurs after a reporting period, but before the financial statements for that period have been issued or are available to be issued. adjusting events only. Event after the reporting period is favorable or unfavorable event that occurs between : The end of the reporting period and. The Interpretations Committee noted that the scope of IAS 10 is the accounting for, and disclosure of, events after the reporting period and that the objective of this Standard is to prescribe: (a) when an entity should adjust its financial 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 Identify the types of eve nts after reporting period. An entity applies judgement to determine which events contributed to the decrease, and determine whether those events evidence circumstances that existed at the end Yes provide if legally required to do so or other parties would expect the company to do so as it is its known policy. Adjusting events after the bankruptcy of a customer that occurs after reporting date that confirms a loss existed at reporting date on trade receivables; sales of inventory after reporting date that give evidence about their net realisable value at reporting date; discovery of fraud or errors that show the financial statements are incorrect. UNIT NUMBER/ HEADING: EVENTS AFTER THE REPORTING PERIOD. 0h 30m. IAS 37, para.75 If an entity starts to implement a restructuring plan, or announces its main features to those affected, only after the reporting period, disclosure is required under IAS 10 Events after the Reporting Period, if the restructuring is material and non?disclosure could reasonably be expected to influence decisions that the primary users of general purpose Date of Authorization for Issue Events after Reporting Period are those that occur between the end of the reporting period and when the financial statements are authorized for issue. The date of authorization for issue is usually taken to be the date when the board of directors authorizes the issue of financial statements. Last Updated: August 2021. Key amendments. Acquisition or disposal of a subsidiary or business combination after reporting date. the resolution of a court case, as the result of which a provision has to be recognised instead of the disclosure by note of a contingent liability; evidence of impairment of assets: Non-adjusting events after the reporting date To the accounting for and disclosure of events that transpired after the reporting period. These are events that occur after the year end of an entity and before the authorization date for the issue of financial statements. Adjusting events are events that provide of conditions that existed after the 3), events after the reporting periodare those events, both favorable and unfavorable, that occur between: 1. Other important points concerning IAS 10. 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 Authorization of Issue Date. Commencing major litigation arising solely out of events that occurred after the reporting period (IAS 10.22 (j)). As mentioned at the beginning, events after the reporting period are those events that occur between the end of the reporting period and the date when the financial statements are authorised for issue. International Accounting Standard 10: Events After the Reporting Period clarifies the accounting treatment for events that occurred after balance sheet date but before financial statements are published. IAS 10 Events after the Reporting Period (2003) was originally issued in December 2003, effective from 1 January 2005. the reporting period and the date when the financial statements are complete. The following are some examples for some potential non-adjusting events for 31 December 2019 financial statements: Business combinations or disposal of subsidiaries, purchases and disposal of assets, classification of assets as held for sales of operations, restructurings, declaration of dividends, changes in law enacted or announced after the reporting period and entering into significant commitments or contingent liabilities are all examples of material non-adjusting IAS 10 Examples include: A court case after the end of the reporting period, conforming that the entity had a present obligation as at the end of the reporting period. As mentioned at the beginning, events after the reporting period are those events that occur between the end of the reporting period and the date when the financial statements are authorised for issue. Non-adjusting events after the reporting period 10 An entity shall not adjust the amounts recognised in its financial statements to reflect non-adjusting events after the reporting period. List of subjects who dropped out of clinical trials in association with an adverse event during the reporting period. The financial statements should not be prepared on a going concern basis where events after the reporting date indicate that the going concern assumption is no longer appropriate [para 14 of MFRS 110 EventsAfter the Reporting Period. These pro- current. Any event that occurs between 31/03/2021 and 30/6/2021 is called event after reporting period. Depending on the situation, such events may or may not require disclosure in an organization's financial statements. The definition according to paragraph 3 in the Standard for events after reporting period is as follows: 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 authorised for issue. FRS 21 (IAS 10) Events after the Balance Sheet Date. For example, if your entitys next reporting period ends on December 31, 2020, its financial statements may include disclosure related to employee termination costs incurred during the year or impairment of equipment that was recorded during the period. This dialog enables you to disclose any material events after the reporting period via the following tabs: Adjusting events after the reporting period. For example, a deterioration in operating results and financial position after the reporting period. your entity reporting period and/or those which are considered adjusting subsequent events. Events took place after the reporting period may require entities to re-consider whether the going concern assumption is still appropriate. Non-adjusting events. period end when they were measured. 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 authorised for issue. ( IAS 10 3 Definitions) These may be favorable or unfavorable. Destruction of fixed assets after reporting date. Examples of such events given in IAS 10 are: Non-adjusting events after the reporting date. In IFRS, the guidance related to events after the balance-sheet date is included in International Accounting Standard (IAS) 10, Events after the Reporting Period. Discuss the concept of e vents after the reporting period . Events after the Reporting Period - Adjusting & Non Adjusting Events - Free ACCA & CIMA online courses from OpenTuition Free Notes, Lectures, Tests. Example discontinuing a division Company A Ltd is a supermarket which operates four different classes of business division: groceries, mobile telephone providers, internet service providers and domestic appliances. Events After the Reporting Period. Examples of adjusting events include: It depends on the size and complexity of the company business. Introduction. 2. an estimate of its financial effect, or a statement that such an estimate can not be (c) Example 1. a major business combination after the reporting period Ind AS 103, Business Combination ; 3. 2.9 Measurement period adjustments. Click New to add information via the Adjusting event after the Reporting Period dialog. This includes information that becomes available on or before the financial statements are authorized for issuance i.e. The two types of subsequent events are noted below. Launch. Environmental Contamination Clearance. reflect adjusting events after the reporting period. Adjusting events after the end of the reporting period are those events which provide evidence that conditions existed at the reporting date. 1. The receipt of information after reporting period that an asset has impaired or already recorded loss needs to be adjusted.