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What is meant non adjusting events in IAS 10?

Non adjusting events are events after reporting period that are indicative of the condition that arose after reporting period. These events occur after reporting period therefore their effects can not lead to adjustments on the figures in the financial statements.

Disclosure should be made in the financial statements of significant non adjusting event after the reporting date. If the non adjusting event leads to going concern basis on preparation of financial statement is no longer applicable, the event should be treated as an adjusting event, and the financial statement should not be prepared on the going concern basis.

Example of non adjusting events include

  • Announcement of plan to discontinue operations
  • destruction of major production plant by fire after reporting period
  • an abnormally large change in asset prices or foreign exchange rates
  • major ordinary share transactions

6 thoughts on “What is meant non adjusting events in IAS 10?”

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