In plain words
Events happen between the year end and the date the statements are approved for issue. If an event gives evidence about conditions that existed at year end, such as a customer's insolvency caused by earlier problems, the figures are adjusted. If it arises afterwards, such as a warehouse fire, it is not adjusted but is disclosed if material. Dividends declared after year end are not a liability at year end.
Why it matters
Between the reporting date and the date the statements are authorised for issue, events may confirm conditions existing at the reporting date (adjusting) or arise afterwards (non-adjusting). IAS 10 governs their treatment and disclosure.
Diagnostic questions
Did anything significant happen between your reporting date and the date the statements were approved, a customer default, a lawsuit outcome, a major loss, or a dividend declaration?
Recognition
Adjust the amounts in the statements for adjusting events (those giving evidence of conditions at the reporting date). Do not adjust for non-adjusting events.
Measurement
Dividends declared after the reporting period are not recognised as a liability at the reporting date. Going concern problems arising after the date may still change the basis of preparation.
Presentation & disclosure
Disclose the nature and estimated financial effect of material non-adjusting events, and the date the statements were authorised for issue and who gave that authorisation.
Common mistakes
- Adjusting for non-adjusting events
- recognising post-period dividends as a liability
- failing to disclose the authorisation date.
Simple example
A major customer becomes insolvent after year end due to conditions that existed at the reporting date, the receivable is adjusted. A warehouse fire after year end is disclosed but not adjusted.
Professional judgment
Judgement is needed to classify an event as adjusting or non-adjusting and to estimate its financial effect.
Source basis
IAS 10 · Events after the Reporting Period
Paragraph references
Verified against the official standard texts used in the IFRS Expert skill.
Related issues
Educational and navigation content only. Not professional advice. Does not reproduce official IFRS/IAS text. Consult the authoritative standards and qualified professionals; professional judgment may still be required.