IAS 10 — Events After the Reporting Period
Hello Friends,
Below quick sneak peek into the IAS 10:
Need for IAS 10
Contains requirements for when events after the end of the reporting period should be adjusted in the financial statements.
Why this need?
Because this will only help the users to have more appropriate view of the financial statements and in turn assist them to make well informed decision/ analysis of the company.
i)Adjusting events
🎀An event after the reporting period that provides further evidence of conditions 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.
ii) Non-adjusting events
🎀An event after the reporting period that is indicative of a condition that arose after the end of the reporting period
iii)Going concern 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
iv)Mandatory Disclosure
🎀Companies must disclose the date when the financial statements were authorized for issue and who gave that authorization. If the enterprise’s owners or others have the power to amend the financial statements after issuance, the enterprise must disclose that fact.
See below extract from the Tata reports , how it is being practically notified in the notes.
Summary : IAS 10 basically outlines when we have to adjust our financial statements for the year for which the financial statements are yet to be issued as they are under preparation and finalization, for the events which take place in between these gap (reporting date/balance sheet date to the date it is authorized for issue).
One more important point to be noticed here is that every financial statements, compiled with IFRS, will have a date of authorization for issue and who authorized it to issue mentioned in it.
Thank you!👏
