Illustrated example of how to answer question on IAS 10.

There is usually a lead time between the end of an entity accounting year and when the financial statements are approved and signed off by directors. In between this period, there are two types of events according to IAS 10 – events after the reporting period, which may require consideration when preparing financial statements
You are required to:
Identify and explain these events and state how they are treated in the financial statements.    


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 statement are authorized for issue

Types of events after reporting period

Adjusting events, these are event that provide evidence of conditions that existed at the end of the reporting period. Adjusting events require adjustment in the financial statements. Examples of adjusting events are

  • Evidence of permanent diminution of property before the year end; 
  • Announcement of the plan to discontinue an operation;  
  • Amount received or paid in respect of legal or insurance for events or transaction which occurred before year end.

Non-adjusting events– these are events that indicate the conditions that arose after the reporting period. Non adjusting events do not require adjustment in the financial statement. Examples of non adjusting events are:

  • Acquisition or disposal of subsidiary after year end; 
  • Announcement of the plan to discontinue operation;  
  • Major purchase and disposal of assets.

We hope that you have found this article useful. If you have any other information you would like to share with us on events after reporting period, please put them on the comment below.

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