In April 2001 the International Accounting Standards Board (IASB) adopted IAS 10 Events After the Balance Sheet Date, which had originally been issued by the International Accounting Standards Committee in May 1999. IAS 10 Events After the Balance Sheet Date replaced parts of IAS 10 Contingencies and Events Occurring After the Balance Sheet Date (issued in June 1978) that were not replaced by IAS 37 Provisions and Contingent Assets and Contingent Liabilities (issued in 1998).

In December 2003 the IASB issued a revised IAS 10 with a modified title—Events after the

Balance Sheet Date. This revised IAS 10 was part of the IASB's initial agenda of technical projects. As a result of the changes in terminology made by IAS 1 Presentation of Financial Statements in 2007, the title of IAS 10 was changed to Events after the Reporting Period.

Other IFRSs have made minor consequential amendments to IAS 10, including IFRS 13 Fair

Value Measurement (issued May 2011).

CONTENTS

INTRODUCTION

INTERNATIONAL ACCOUNTING STANDARD 10

EVENTS AFTER THE REPORTING PERIOD

OBJECTIVE

SCOPE

DEFINITIONS

RECOGNITION AND MEASUREMENT

Adjusting events after the reporting period

Non-adjusting events after the reporting period

Dividends

GOING CONCERN

DISCLOSURE

Date of authorisation for issue

Updating disclosure about conditions at the end of the reporting period

Non-adjusting events after the reporting period

EFFECTIVE DATE

WITHDRAWAL OF IAS 10 (REVISED 1999)

APPENDIX

Amendments to other pronouncements

from paragraph

FOR THE ACCOMPANYING DOCUMENTS LISTED BELOW, SEE PART B OF THIS

EDITION

APPROVAL BY THE BOARD OF IAS 10 ISSUED IN DECEMBER 2003

BASIS FOR CONCLUSIONS

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 International Financial Reporting 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.

Introduction

              International Accounting Standard 10 Events after the Reporting Period (IAS 10)1

replaces IAS 10 Events After the Balance Sheet Date (revised in 1999) and should be applied for annual periods beginning on or after 1 January 2005. Earlier application is encouraged.

Reasons for revising IAS 10

The International Accounting Standards Board developed this revised IAS 10 as part of its project on Improvements to International Accounting Standards. The project was undertaken in the light of queries and criticisms raised in relation to the Standards by securities regulators, professional accountants and other interested parties. The objectives of the project were to reduce or eliminate alternatives, redundancies and conflicts within the Standards, to deal with some convergence issues and to make other improvements.

For IAS 10 the Board's main objective was a limited clarification of the accounting for dividends declared after the reporting period. The Board did not reconsider the fundamental approach to the accounting for events after the reporting period contained in IAS 10.

The main changes

The main change from the previous version of IAS 10 was a limited clarification of paragraphs 12 and 13 (paragraphs 11 and 12 of the previous version of IAS 10). As revised, those paragraphs state that 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.

     In September 2007 the IASB amended the title of IAS 10 from Events after the Balance Sheet Date to

Events after the Reporting Period as a consequence of the revision of IAS 1 Presentation of Financial Statements in 2007.

International Accounting Standard 10

Events after the Reporting Period

Objective

              The objective of this Standard is to prescribe:

when an entity should adjust its financial statements for events after the

reporting period; and

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 Standard also requires that an entity should not prepare its financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is not appropriate.

Scope

              This Standard shall be applied in the accounting for, and disclosure of,

events after the reporting period.

Definitions

              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. Two types of

events can be identified:

those that provide evidence of conditions that existed at the end of

the reporting period (adjusting events after the reporting period);

and

those that are indicative of conditions that arose after the

reporting period (non-adjusting events after the reporting period).

              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.

              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).

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).

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

              An entity shall adjust the amounts recognised in its financial statements

to reflect adjusting events after the reporting period.

              The following are examples of adjusting events after the reporting period that

require an entity to adjust the amounts recognised in its financial statements, or

to recognise items that were not previously recognised:

         the settlement after the reporting period of a court case that confirms

that the entity had a present obligation 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.

          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:

the bankruptcy of a customer that occurs after the reporting period usually confirms that a loss existed at the end of the reporting period on a trade receivable and that the entity needs

to adjust the carrying amount of the trade receivable; and

the sale of inventories after the reporting period may give

evidence about their net realisable value at the end of the reporting period.

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.

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).

the discovery of fraud or errors that show that the financial statements

are incorrect.

Non-adjusting events after the reporting period

An entity shall not adjust the amounts recognised in its financial

statements to reflect non-adjusting events after the reporting period.

An example of a non-adjusting event after the reporting period 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. 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

If an entity declares dividends to holders of equity instruments (as

defined in IAS 32 Financial Instruments: Presentation) after the reporting

period, the entity shall not recognise those dividends as a liability at the end of the reporting period.

If dividends are declared after the reporting period but before the financial statements are authorised for issue, 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.

Going concern

An entity shall not prepare its 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.

Deterioration in operating results and financial position after the reporting period may indicate a need to consider whether the going concern assumption 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.

IAS 1 specifies required disclosures if:

Disclosure

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

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.

Date of authorisation for issue

An entity shall disclose the date when the financial statements were

authorised for issue 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.

It is important for users to know when the financial statements were authorised for issue, because the financial statements do not reflect events after this date.

Updating disclosure about conditions at the end of the

reporting period

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.

In some cases, an entity needs to update the disclosures in its financial statements to reflect information received after the reporting period, 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 about the contingent liability in the light of that evidence.

Non-adjusting events after the reporting period

If non-adjusting events after the reporting period are material,

non-disclosure could influence the economic decisions that users make on the basis of the financial statements. Accordingly, an entity shall disclose the following for each material category of non-adjusting event

after the reporting period:

          the nature of the event; and

          an estimate of its financial effect, or a statement that such an

estimate cannot be made.

              The following are examples of non-adjusting events after the reporting period

that would generally result in disclosure:

a major business combination after the reporting period (IFRS 3 Business

Combinations requires specific disclosures in such cases) or disposing of a

major subsidiary;

announcing a plan to discontinue an operation;

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, other disposals of assets, or expropriation of major assets by

government;

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

period;

announcing, or commencing the implementation of, a major

restructuring (see IAS 37);

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);

abnormally large changes after the reporting period in asset prices or

foreign exchange rates;

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);

entering into significant commitments or contingent liabilities, for

example, by issuing significant guarantees; and

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

Effective date

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.

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

Withdrawal of IAS 10 (revised 1999)

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

Appendix

Amendments 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.

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