Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd
Upload
58 views

Pas 10

PAS 10 provides guidance on accounting for events that occur after the end of a reporting period but before financial statements are authorized for issue. It distinguishes between adjusting events, which provide evidence of conditions that existed at the end of the reporting period and require adjustments to amounts recognized in financial statements, and non-adjusting events, which provide evidence that arose after the reporting period and do not require adjustments but need to be disclosed if material. Examples of adjusting events include legal cases confirming liabilities, asset impairments identified, and profit-sharing amounts determined after the period end. Non-adjusting events can include changes in fair values, casualty losses, new commitments, and major business changes.

Uploaded by

Justine Verallo
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
58 views

Pas 10

PAS 10 provides guidance on accounting for events that occur after the end of a reporting period but before financial statements are authorized for issue. It distinguishes between adjusting events, which provide evidence of conditions that existed at the end of the reporting period and require adjustments to amounts recognized in financial statements, and non-adjusting events, which provide evidence that arose after the reporting period and do not require adjustments but need to be disclosed if material. Examples of adjusting events include legal cases confirming liabilities, asset impairments identified, and profit-sharing amounts determined after the period end. Non-adjusting events can include changes in fair values, casualty losses, new commitments, and major business changes.

Uploaded by

Justine Verallo
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

PAS 10

Events After the


Reporting Period
Introduction

PAS 10 prescribes the accounting for, and


disclosures of, events after the reporting
period, including disclosures regarding the
date when the financial statements were
authorized for issue.
Events after the Reporting Period

Events after the reporting period are “those events, favorable and
unfavorable, that occur between the end of the reporting period and
the date when the financial statements are authorized for issue”. (PAS
10.3)

For example, Entity A’s reporting period ends on December 31, 20x1
and its financial statements are authorized for issue on March 31,
20x2. Events after the reporting period are those events that occur
within January 1, 20x2 to March 31, 20x2.

⮚ The date of authorization of the financial statements is the date


when management authorizes the financial statements for issue
regardless of whether such authorization is final or subject to
further approval.
Two types of events after the reporting period

1. Adjusting events after the reporting period – are


events that provide evidence of conditions that
existed at the end of the reporting period.

2. Non-adjusting events after the reporting period


– are events that are indicative of conditions that
arose after the reporting period.
Adjusting events after the reporting period

Adjusting events, as the name suggests, require adjustments of


amounts in the financial statements. Examples of adjusting events:
a. The settlement after the reporting period of a court case that
confirms that the entity has a present obligation at the end of the
reporting period.
b. The receipt of information after the reporting period indicating
that an asset was impaired at the end of reporting period. For
example:
i. The bankruptcy of a customer that occurs after the reporting period
may indicate that carrying amount of a trade receivable at the end of
reporting period is impaired.
ii. The sale of inventories after the reporting period may give evidence
to their net realizable value at the end of reporting period.
c. The determination after the reporting period of the cost
of asset purchased, or the proceeds from asset sold,
before the end of reporting period.

d. The determination after the reporting period of the


amount of profit-sharing or bonus payments, if the entity
had a present legal or constructive obligation at the end
of reporting period to make such payments.

e. The discovery of fraud or errors that indicate that the


financial statements are incorrect. (PAS 10.9)
Non-adjusting events after the reporting period

Non-adjusting events do not require adjustments of amounts in the


financial statements. However, they are disclosed if they are material.
Examples of non-adjusting events:
a. Changes in fair values, foreign exchange rates, interest rates or
market prices after the reporting period.
b. Casualty losses (e.g., fire, storm, or earthquake) occurring after the
reporting period but before the financial statements were
authorized for issue.
c. Litigation arising solely from events occurring after the reporting
period.
d. Significant commitments or contingent liabilities entered after the
reporting period, e.g., significant guarantees.
e. Major ordinary share transactions and potential ordinary share
transactions after the reporting period.

f. Major business combination after the reporting period.

g. Announcing, or commencing the implementation of, a major


restructuring after the reporting period.

h. Announcing a plan to discontinue an operation after the reporting


period.

i. Change in tax rate enacted after the reporting period.

j. Declaration of dividends after the reporting period. (PAS 10.9)


Dividends

Dividends declared after the reporting period


are not recognized as liability at the end of the
reporting period because no present obligation
exists at the end of reporting period.
Going Concern

PAS 10 prohibits the preparation of 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.

You might also like