Pas 10 - Summary
Pas 10 - Summary
- contains requirements for when events after the end of the reporting period
should be adjusted in the financial statements.
KEY DEFINITIONS:
Event after the reporting period
- An event, which could be favourable or unfavourable, that occurs between the
end of the reporting period and the date that the financial statements are
authorised for issue.
Adjusting event
- An event after the reporting period that provides further evidence of conditions
An
that existed at the end of the reporting period, including an event that indicates
that the going concern assumption in relation to the whole or part of the
enterprise is not appropriate.
Non-adjusting event
- An event after the reporting period that is indicative of a condition that arose after
the end of the reporting period.
Accounting
Adjust financial statements for adjusting events
- events after the balance sheet date that provide further evidence of conditions
that existed at the end of the reporting period, including events that indicate that
the going concern assumption in relation to the whole or part of the enterprise is
not appropriate.
Do not adjust for non-adjusting events
- events or conditions that arose after the end of the reporting period.
If an entity declares dividends after the reporting period, the entity shall not
recognise those dividends as a liability at the end of the reporting period. That is
a non-adjusting event.
Going concern issues arising after 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.
Disclosure
- Non-adjusting events should be disclosed if they are of such importance that
non-disclosure would affect the ability of users to make proper evaluations and
decisions.
The required disclosure is
a. the nature of the event
b. an estimate of its financial effect or a statement that a reasonable
estimate of the effect cannot be made.
- A company should update disclosures that relate to conditions that existed at the
end of the reporting period to reflect any new information that it receives after the
reporting period about those conditions.
- Companies must disclose the date when the financial statements were
authorised for issue and who gave that authorisation. If the enterprise's owners
or others have the power to amend the financial statements after issuance, the
enterprise must disclose that fact.