International Accounting Standard 10 Events after the Reporting Period (IAS 10) is set out in paragraphs 1⁠–⁠24 and the Appendix. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. IAS 10 should be read in the context of its objective and the Basis for Conclusions, the Preface to IFRS Standards and the Conceptual Framework for Financial Reporting. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance. [Refer:IAS 8 paragraphs 10⁠–⁠12]

International Accounting Standard 10Events after the Reporting Period

Objective

1

The objective of this Standard is to prescribe:

(a)

when an entity should adjust its financial statements for events after the reporting period; and

[Refer:paragraphs 8 and 9]

(b)

the disclosures that an entity should give about the date when the financial statements were authorised for issue [Refer:paragraphs 4⁠–⁠6, 17 and 18] and about events after the reporting period [Refer:paragraphs 19⁠–⁠22].

[Refer:Conceptual Framework paragraph 3.7]

The Standard also requires that an entity should not prepare its financial statements on a going concern [Refer:paragraphs 14⁠–⁠16] basis if events after the reporting period [Refer:paragraph 3 (definition of events after the reporting period)] indicate that the going concern assumption [Refer:IAS 1 paragraphs 25 and 26] is not appropriate.

Scope

2

This Standard shall be applied in the accounting for, [Refer:paragraphs 8⁠–⁠16] and disclosure of, [Refer:paragraphs 17⁠–⁠22] events after the reporting period.

Definitions

3

The following terms are used in this Standard with the meanings specified:

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.E1 [Refer:paragraphs 4⁠–⁠6] Two types of events can be identified:

(a)

those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and

[Refer:paragraphs 8 and 9]

(b)

those that are indicative of conditions that arose after the reporting period (non‑adjusting events after the reporting period).

[Refer:paragraphs 10 and 11]
E1

[IFRIC® Update, May 2013, Agenda Decision, ‘IAS 10 Events after the Reporting Period—Reissuing previously issued Financial Statements’

The Interpretations Committee was asked to clarify the accounting implications of applying IAS 10 Events after the Reporting Period when previously issued financial statements are reissued in connection with an offering document. The issue arose in jurisdictions in which securities laws and regulatory practices require an entity to reissue its previously issued annual financial statements in connection with an offering document, when the most recently filed interim financial statements reflect matters that are accounted for retrospectively under the applicable accounting standards. In these jurisdictions, securities law and regulatory practices do not require or permit the entity, in its reissued financial statements, to recognise events or transactions that occur between the time the financial statements were first authorised for issued and the time the financial statements are reissued, unless the adjustment is required by national regulation; instead security and regulatory practices require the entity to recognise in its reissued financial statements only those adjustments that would ordinarily be made to the comparatives in the following year’s financial statements. These adjustments would include, for example, adjustments for changes in accounting policy that are applied retrospectively, but would not include changes in accounting estimates. This approach is called ‘dual dating’. The submitter asked the Interpretations Committee to clarify whether IAS 10 permits only one date of authorisation for issue (ie ‘dual dating’ is not permitted) when considered within the context of reissuing previously issued financial statements in connection with an offering document.

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 statements for events after the reporting period; and

(b)

the disclosures that an entity should give about the date when the financial statements were authorised for issue and about events after the reporting period.

The Interpretations Committee also noted that financial statements prepared in accordance with IAS 10 should reflect all adjusting and non-adjusting events up to the date that the financial statements were authorised for issue.

The Interpretations Committee noted that IAS 10 does not address the presentation of re-issued financial statements in an offering document when the originally issued financial statements have not been withdrawn, but the re-issued financial statements are provided either as supplementary information or a re-presentation of the original financial statements in an offering document in accordance with regulatory requirements.

On the basis of the above and because the issue arises in multiple jurisdictions, each with particular securities laws and regulations which may dictate the form for re-presentations of financial statements, the Interpretations Committee decided not to add this issue to its agenda.]

4

The process involved in authorising the financial statements for issue will vary depending upon the management structure, statutory requirements and procedures followed in preparing and finalising the financial statements.

5

In some cases, an entity is required to submit its financial statements to its shareholders for approval after the financial statements have been issued. In such cases, the financial statements are authorised for issue on the date of issue, not the date when shareholders approve the financial statements.

Example

The management of an entity completes draft financial statements for the year to 31 December 20X1 on 28 February 20X2. On 18 March 20X2, the board of directors reviews the financial statements and authorises them for issue. The entity announces its profit and selected other financial information on 19 March 20X2. The financial statements are made available to shareholders and others on 1 April 20X2. The shareholders approve the financial statements at their annual meeting on 15 May 20X2 and the approved financial statements are then filed with a regulatory body on 17 May 20X2.

The financial statements are authorised for issue on 18 March 20X2 (date of board authorisation for issue).

6

In some cases, the management of an entity is required to issue its financial statements to a supervisory board (made up solely of non‑executives) for approval. In such cases, the financial statements are authorised for issue when the management authorises them for issue to the supervisory board.

Example

On 18 March 20X2, the management of an entity authorises financial statements for issue to its supervisory board. The supervisory board is made up solely of non‑executives and may include representatives of employees and other outside interests. The supervisory board approves the financial statements on 26 March 20X2. The financial statements are made available to shareholders and others on 1 April 20X2. The shareholders approve the financial statements at their annual meeting on 15 May 20X2 and the financial statements are then filed with a regulatory body on 17 May 20X2.

The financial statements are authorised for issue on 18 March 20X2 (date of management authorisation for issue to the supervisory board).

7

Events after the reporting period include all events up to the date when the financial statements are authorised for issue, even if those events occur after the public announcement of profit or of other selected financial information.

Recognition and measurement

Adjusting events after the reporting period

8

An entity shall adjust the amounts recognised in its financial statements to reflect adjusting events after the reporting period. [Refer:paragraph 3(a)]

9

The following are examples of adjusting events after the reporting period [Refer:paragraph 3(a)] that require an entity to adjust the amounts recognised in its financial statements, or to recognise items that were not previously recognised: 

(a)

the settlement after the reporting period of a court case that confirms that the entity had a present obligation [Refer:IAS 37 paragraphs 14⁠–⁠26] at the end of the reporting period. The entity adjusts any previously recognised provision related to this court case in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets or recognises a new provision. The entity does not merely disclose a contingent liability because the settlement provides additional evidence that would be considered in accordance with paragraph 16 of IAS 37.

(b)

the receipt of information after the reporting period indicating that an asset was impaired at the end of the reporting period, or that the amount of a previously recognised impairment loss for that asset needs to be adjusted. For example:

(i)

the bankruptcy of a customer that occurs after the reporting period usually confirms that the customer was credit-impaired [Refer:IFRS 9 Appendix A] at the end of the reporting period; and

(ii)

the sale of inventories after the reporting period may give evidence about their net realisable value at the end of the reporting period.

(c)

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.

(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 the reporting period to make such payments as a result of events before that date (see IAS 19 Employee Benefits). [Refer:IAS 19 paragraphs 19⁠–⁠24]

(e)

the discovery of fraud or errors that show that the financial statements are incorrect.

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. [Refer:paragraph 3(b)]

11

An example of a non‑adjusting event after the reporting period [Refer:paragraph 3(b)] 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. [Refer:paragraphs 4⁠–⁠6] The decline in fair value does not normally relate to the condition of the investments at the end of the reporting period, but reflects circumstances that have arisen subsequently. Therefore, an entity does not adjust the amounts recognised in its financial statements for the investments. Similarly, the entity does not update the amounts disclosed for the investments as at the end of the reporting period, although it may need to give additional disclosure under paragraph 21.

Dividends

[Refer:Basis for Conclusions paragraph BC4]

12

If an entity declares dividends to holders of equity instruments (as defined in IAS 32 Financial Instruments: Presentation [Refer:IAS 32 paragraph 11 (definition of an equity instrument)]) after the reporting period, [Refer:paragraphs 4⁠–⁠6] the entity shall not recognise those dividends as a liability at the end of the reporting period.

13

If dividends are declared after the reporting period but before the financial statements are authorised for issue, [Refer:paragraphs 3⁠–⁠7] the dividends are not recognised as a liability at the end of the reporting period because no obligation exists at that time. Such dividends are disclosed in the notes in accordance with IAS 1 Presentation of Financial Statements. [Refer:IAS 1 paragraph 137]

[Refer:IFRIC 17 Basis for Conclusions paragraphs BC18⁠–⁠BC20]
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners Disclosure Xduration IAS 1.137 a Disclosure 810000, 815000

Going concern

14

An entity shall not prepare its financial statements on a going concern basis [Refer:IAS 1 paragraphs 25 and 26] 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.

15

Deterioration in operating results [Refer:IAS 1 Basis for Conclusions paragraphs BC55 and BC56] and financial position after the reporting period may indicate a need to consider whether the going concern assumption [Refer:IAS 1 paragraph 25] is still appropriate. If the going concern assumption is no longer appropriate, the effect is so pervasive that this Standard requires a fundamental change in the basis of accounting, rather than an adjustment to the amounts recognised within the original basis of accounting.

16

IAS 1 specifies required disclosures if:

[Refer:IAS 1 paragraph 25]

(a)

the financial statements are not prepared on a going concern basis; or

(b)

management is aware of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern. The events or conditions requiring disclosure may arise after the reporting period.

Disclosure

Disclosure of events after reporting period [text block] Disclosure text block 800500, 815000

Date of authorisation for issue

17

An entity shall disclose the date when the financial statements were authorised for issue [Refer:paragraphs 4⁠–⁠6] and who gave that authorisation. If the entity’s owners or others have the power to amend the financial statements after issue, the entity shall disclose that fact.

Date of authorisation for issue of financial statements Disclosure yyyy-mm-dd 815000
Explanation of body of authorisation Disclosure text 815000
Explanation of fact that entity's owners or others have power to amend financial statements after issue Disclosure text 815000

18

It is important for users to know when the financial statements were authorised for issue [Refer:paragraphs 4⁠–⁠6], because the financial statements do not reflect events after this date.

Updating disclosure about conditions at the end of the reporting period

19

If an entity receives information after the reporting period about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions, in the light of the new information.

20

In some cases, an entity needs to update the disclosures in its financial statements to reflect information received after the reporting period, [Refer:paragraphs 3⁠–⁠7] even when the information does not affect the amounts that it recognises in its financial statements. One example of the need to update disclosures is when evidence becomes available after the reporting period about a contingent liability that existed at the end of the reporting period. In addition to considering whether it should recognise or change a provision under IAS 37, an entity updates its disclosures [Refer:IAS 37 paragraphs 86⁠–⁠92] about the contingent liability in the light of that evidence.

Non-adjusting events after the reporting period

21

If non‑adjusting events after the reporting period [Refer:paragraph 3(b)] are material, [Refer:IAS 1 paragraphs 29⁠–⁠31] non‑disclosure could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. 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

Description of nature of non-adjusting event after reporting period Disclosure text 815000

(b)

an estimate of its financial effect, or a statement that such an estimate cannot be made.

Explanation of financial effect of non-adjusting event after reporting period [text block] Disclosure text block 815000
Disclosure of non-adjusting events after reporting period [table] Disclosure table 815000
Disclosure of non-adjusting events after reporting period [text block] Disclosure text block 815000
Non-adjusting events after reporting period [axis] Disclosure axis 815000, 990000
Non-adjusting events after reporting period [member] Disclosure member 815000, 990000

22

The following are examples of non‑adjusting events after the reporting period [Refer:paragraph 3(b)] that would generally result in disclosure:

(a)

a major business combination after the reporting period (IFRS 3 Business Combinations requires specific disclosures in such cases [Refer:IFRS 3 paragraphs 59(b) and B66]) or disposing of a major subsidiary;

Disposal of major subsidiary [member] Example member 815000
Major business combination [member] Example member 815000

(b)

announcing a plan to discontinue an operation;

Announcement of plan to discontinue operation [member] Example member 815000

(c)

major purchases of assets, classification of assets as held for sale in accordance with IFRS 5 Non‑current Assets Held for Sale and Discontinued Operations, [Refer:IFRS 5 paragraphs 6⁠–⁠14] other disposals of assets, or expropriation of major assets by government;

Classification of assets as held for sale [member] Example member 815000
Expropriation of major assets by government [member] Example member 815000
Major purchases of assets [member] Example member 815000
Other disposals of assets [member] Example member 815000

(d)

the destruction of a major production plant by a fire after the reporting period;

Destruction of major production plant [member] Example member 815000

(e)

announcing, or commencing the implementation of, a major restructuring (see IAS 37);

[Refer:IAS 37 paragraphs 70⁠–⁠83]
Announcing or commencing implementation of major restructuring [member] Example member 815000

(f)

major ordinary share transactions and potential ordinary share transactions after the reporting period (IAS 33 Earnings per Share requires an entity to disclose a description of such transactions, other than when such transactions involve capitalisation or bonus issues, share splits or reverse share splits all of which are required to be adjusted under IAS 33);

[Refer:IAS 33 paragraphs 70(d) and 71]
Major ordinary share transactions [member] Example member 815000
Potential ordinary share transactions [member] Example member 815000

(g)

abnormally large changes after the reporting period in asset prices or foreign exchange rates;

Abnormally large changes in asset prices or foreign exchange rates [member] Example member 815000

(h)

changes in tax rates or tax laws enacted or announced after the reporting period that have a significant effect on current and deferred tax assets and liabilities (see IAS 12 Income Taxes [Refer:IAS 12 paragraph 5 (definitions)]);

Changes in tax rates or tax laws enacted or announced [member] Example member 815000

(i)

entering into significant commitments or contingent liabilities, for example, by issuing significant guarantees; and

Entering into significant commitments or contingent liabilities [member] Example member 815000

(j)

commencing major litigation arising solely out of events that occurred after the reporting period.

Commencement of major litigation [member] Example member 815000

Effective date

23

An entity shall apply this Standard for annual periods beginning on or after 1 January 2005. Earlier application is encouraged. If an entity applies this Standard for a period beginning before 1 January 2005, it shall disclose that fact.

23A

IFRS 13 Fair Value Measurement, issued in May 2011, amended paragraph 11. An entity shall apply that amendment when it applies IFRS 13.

23B

IFRS 9 Financial Instruments, as issued in July 2014, amended paragraph 9. An entity shall apply that amendment when it applies IFRS 9.

23C

Definition of Material (Amendments to IAS 1 and IAS 8), issued in October 2018, amended paragraph 21. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2020. Earlier application is permitted. If an entity applies those amendments for an earlier period, it shall disclose that fact. An entity shall apply those amendments when it applies the amendments to the definition of material in paragraph 7 of IAS 1 and paragraphs 5 and 6 of IAS 8. 

Withdrawal of IAS 10 (revised 1999)

24

This Standard supersedes IAS 10 Events After the Balance Sheet Date (revised in 1999).

Appendices

AppendixAmendments to other pronouncements

The amendments in this appendix shall be applied for annual periods beginning on or after 1 January 2005. If an entity applies this Standard for an earlier period, these amendments shall be applied for that earlier period.

* * * * *

The amendments contained in this appendix when this Standard was revised in 2003 have been incorporated into the relevant IFRSs published in this volume.

Board Approvals

Approval by the Board of IAS 10 issued in December 2003

International Accounting Standard 10 Events after the Balance Sheet Date (as revised in 2003) was approved for issue by the fourteen members of the International Accounting Standards Board.

Sir David TweedieChairman
Thomas E JonesVice-Chairman
Mary E Barth
Hans-Georg Bruns
Anthony T Cope
Robert P Garnett
Gilbert Gélard
James J Leisenring
Warren J McGregor
Patricia L O’Malley
Harry K Schmid
John T Smith
Geoffrey Whittington
Tatsumi Yamada