ExpertEvents After the Reporting Period
Learning outcomes
- Define an event after the reporting period under IFRS
- Classify events as adjusting or non-adjusting
- Distinguish between how adjusting and non-adjusting events are reported
Objective A-C: Events After the Reporting Period (IAS 10)
An event after the reporting period is an event that occurs between the end of the reporting period (e.g., 31 December) and the date the financial statements are authorised for issue (e.g., 15 March).
Adjusting Events
Adjusting events provide evidence of conditions that existed at the end of the reporting period. The financial statements are adjusted to reflect these events.
Examples:
- Settlement of a court case confirming a liability existed at year-end
- Discovery of fraud or errors relating to the reporting period
- Bankruptcy of a customer confirming a receivable was impaired at year-end
- Sale of inventory after year-end at below cost (confirming NRV was lower)
Non-Adjusting Events
Non-adjusting events indicate conditions that arose after the end of the reporting period. The financial statements are NOT adjusted, but if the event is material, it is disclosed in the notes.
Examples:
- A major acquisition or disposal after year-end
- A natural disaster destroying assets after year-end
- A significant decline in market value of investments after year-end
- Announcement of a major restructuring plan after year-end
Adjusting vs. Non-Adjusting
Adjusting = condition EXISTED at year-end → ADJUST the financial statements.
Non-adjusting = condition AROSE after year-end → DISCLOSE in notes (if material).
The key question is: Did the condition exist at the reporting date?
A company's year-end is 31 December 20X4. On 15 February 20X5, a major customer that owed £100,000 at year-end declares bankruptcy. How should this be treated?
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ACCA FA — Financial Accounting Practice Exam 1
A complete mock exam replication for ACCA Financial Accounting (FA). This exam mirrors live computer-based testing parameters, featuring 35 Objective Test Questions (Section A) and 2 Multi-Task Questions broken down into 30 independent sub-questions (Section B). Covers double-entry accounting, ledger adjustments, group consolidations, and financial statement production.