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    Notes 5

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    sjayceelyn
    notes in cfas

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    Notes 5

    Uploaded by

    sjayceelyn
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    notes in cfas

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    © © All Rights Reserved

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    notes in cfas

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    4 views3 pages

    Notes 5

    Uploaded by

    sjayceelyn
    notes in cfas

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Events After Reporting Period

    Overview

    IAS 10 Events After the Reporting Period

     contains requirements for when events after the end of the reporting period should be adjusted
    in the financial statements.
     Adjusting events are those providing evidence of conditions existing at the end of the reporting
    period, whereas
     Non-adjusting events are indicative of conditions arising after the reporting period (the latter
    being disclosed where material).

    IAS 10 was reissued in December 2003 and applies to annual periods beginning on or after 1 January
    2005.

    Objective

    When

    ✔To adjust the FS

    Events that occur between the end of the reporting period and the date that the financial statements are
    authorized for issue.

    What

    ✓ To disclose

    (a) the nature of the event and

    (b) an estimate of its financial effect or a statement that a reasonable estimate of the effect cannot be
    made. [IAS 10.21]

    X No Going Concern

    An entity shall not prepare its financial statements on a going concern basis if management determines
    after the end of 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. [IAS 10.14]
    Adjusting Events Examples

    Going concern issues arising after the end of the reporting period

    • An entity shall not prepare its financial statements on a going concern basis if management determines
    after the end of 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. [IAS 10.14]

    Adjusting Events Examples

    • Settlement after the reporting period of a court case because it confirms that the entity already had a
    present obligation at the end of the reporting period.

    • Sale of inventories after the reporting period may give evidence about the net realizable value at the
    reporting date.
    • The determination after the reporting period of the cost of assets purchased or the proceeds from
    assets sold before the end of the reporting period. The discovery of fraud or errors that show the
    financial statements were incorrect.

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