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IAS 10 - Events after the reporting period - TutnIQ
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IAS 10 - Events after the reporting period

Dealing with events between period end and authorization date

  • This tutorial explains how to disclose and account for events that occur between the end of the reporting period and the date when the financial statements are authorized for issue, in accordance with IAS 10, part of the International Financial Reporting Standards (IFRS).

  • Introduction and definitions

  • Events after the reporting period are events (favorable and unfavorable) that occur between the end of the reporting period (normally the financial year-end) and the date when the financial statements are authorized for issue. IAS 10 prescribes the accounting treatment and disclosure requirements for events after the reporting period.

    This tutorial will discuss:

    • The date the financial statements are authorized for issue;
    • The different types of event after the reporting period;
    • The treatment of dividends declared after period end;
    • The consequences of going concern issues arising after the reporting period; and
    • The accounting treatment and disclosure requirements applicable to events after the reporting period;

    A copy of IAS 10 can be downloaded from the IFRS Foundation. You will need to register if you want to download IAS 10, but this is free.

    IAS 10 applies to reporting periods beginning on or after 1 January 2005.

    Authorization for issue

    Financial statements are authorized for issue when they are approved by management (aka the Board of Directors) for issue.

    In some instances the financial statements must be approved by a supervisory board comprising non-executive members, in such situations the financial statements are authorized for issue when management authorizes them for issue to the supervisory board.

    It may also happen that the financial statements must be approved by the shareholders. When this is the case, the financial statements are authorized for issue when they authorized for issue to the shareholders.

    Why is this important?

    The date the financial statements are authorized for issue is important as this will be the cutoff date for adjusting the financial statements. It will not be possible to report any events occurring after this date as the financial statements may have already been issued or published.

    Types of event after the reporting period

    There are two types of event after the reporting period:

    • Adjusting events: These provide evidence of conditions that existed at the end of the reporting period; and

    • Non-adjusting events: These are indicative of conditions that arose after the end of the reporting period.

  • Per IAS 10, events after the reporting period are events that occur between the end of the reporting period and the date when the financial statements are authorized for issue. The standard focuses on the following events:

    Please select the correct answer:

    out of points awarded.

  • ABC Limited has recently published annual financial statements for the year ended 31 December 20X1.

    What is the cut-off date for consideration of events after the reporting period per IAS 10?

    Please select the correct answer:

    out of points awarded.

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