(Summary) Ind AS 10
Events after Reporting Period
This Standard guides on adjustments in FS for the events which occur after entity’s reporting period and their disclosure. It also states that entity should not prepare FS on going concern if events after reporting period indicate that the assumption is not correct.
This Standard shall be applied in the accounting for, and disclosure of, events after the reporting period.
- Events after reporting period
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 FS are approved by the Board of Directors in case of a company, and, by the corresponding approving authority in case of any other entity for issue.
- Adjusting events after reporting period: Adjust the amounts recognised in its FS to reflect adjusting events after reporting period.
- Non-adjusting events after the reporting period: An entity shall not adjust the amounts recognised in its FS to reflect non- adjusting events after the reporting period.
- If an entity declares dividends to holders of equity instruments 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 FS are approved for issue, the dividends are not recognised as a liability at the end of the reporting period because no obligation exists at that time.
An entity shall not prepare its FS 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.
- An entity shall disclose the date when the FS were approved for issue and who gave that approval. If the entity’s owners or others have the power to amend the FS after issue, the entity shall disclose that fact.
- 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
- 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 FS. 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.