International Financial Reporting Standards_guide.pdf

324 Chapter 30 Events after the Reporting Period (IAS 10)
30.4 ACCOUNTING TREATMENT
30.4.1 Amounts recognized in the financial statements of an entity are adjusted for events
occurring after the reporting period that provide additional information about conditions
existing at the end of the reporting period, and therefore allow these amounts to be estimated
more accurately. For example, adjustments could be required for a loss recognized on a trade
debtor that is confirmed by the bankruptcy of a customer after the reporting period.
30.4.2 If events occur after the reporting period and the events do not affect the condition
of assets and liabilities at the end of the reporting period, no adjustment is required.
However, disclosure should be made of such events if they are of such importance that nondisclosure
would affect decisions made by users of the financial statements. For example, it
should be disclosed if an earthquake destroys a major portion of the manufacturing plant of
the entity after the reporting period or an event were to alter the current or noncurrent classification
of an asset at the end of the reporting period, per IAS 1.
30.4.3 Dividends or a liability for dividend should only be recognized if appropriately
declared and authorized and thus are no longer at the discretion of the entity. Dividends that
are proposed or declared after the end of the reporting period but before the approval of the
financial statements should not be recognized as a liability at the end of the reporting period
but should be disclosed in the notes to the financial statements.
30.4.4 An entity should not prepare financial statements on a going-concern basis if management
determines after the reporting period that it intends to either liquidate the entity or
cease trading (or that it has no realistic alternative but to do so). For example, if a fire destroys
a major part of the business after the year-end, going-concern considerations would override
all considerations (even if an event technically did not require disclosure) and the financial
statements would be adjusted.
30.4.5 The process of authorization for issue of financial statements will depend on the
form of the entity and its management structure. The date of authorization for issue would
normally be the date on which the financial statements are authorized for release outside the
entity.
30.5 PRESENTATION AND DISCLOSURE
30.5.1 Disclosure requirements related to the date of authorization for issue are as follows:
■ the date when financial statements were authorized for issue;
■ the name of the person who gave the authorization; and
■ the name of the party (if any) with the power to amend the financial statements after
issuance.
30.5.2 For nonadjusting events that would affect the ability of users to make proper evaluations
and decisions, the following should be disclosed:
■ the nature of the event;
■ an estimate of the financial effect; and
■ a statement if such an estimate cannot be made.
30.5.3 Disclosures that relate to conditions that existed at the end of the reporting period
should be updated in light of any new information about those conditions that is received
after the reporting period.