IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

IAS 10 Events After the Reporting Period

In April 2001 the International Accounting Standards Board (IASB) adopted IAS 10 EventsAfter the Balance Sheet Date,
which had originally been issued by the International Accounting Standards Committee in May 1999. IAS 10 Events After the
Balance Sheet Date replaced parts of IAS 10 Contingencies and Events Occurring After the Balance Sheet Date (issued in
June 1978) that were not replaced by IAS 37 Provisions and Contingent Assets and Contingent Liabilities (issued in 1998).
In December 2003 the IASB issued a revised IAS 10 with a modified title Events after theBalance Sheet Date. This revised
IAS 10 was part of the IASB's initial agenda of technical projects. As a result of the changes in terminology made by IAS 1
Presentation of FinancialStatements in 2007, the title of IAS 10 was changed to Events after the Reporting Period.
Other IFRSs have made minor consequential amendments to IAS 10. They include IFRS 5 Non-Current Assets Held for Sale
and Discontinued Operations (issued March 2004) and Improvements to IFRSs (issued May 2008).

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Contents
from paragraph
INTRODUCTION

IN1

OBJECTIVE

SCOPE

DEFINITIONS

RECOGNITION AND MEASUREMENT

Adjusting events after the reporting period

Non-adjusting events after the reporting period

10

Dividends

12

GOING CONCERN

14

DISCLOSURE

17

Date of authorisation for issue

17

Updating disclosure about conditions at the end of the reporting period

19

Non-adjusting events after the reporting period

21

EFFECTIVE DATE

23

WITHDRAWAL OF IAS 10 (REVISED 1999)

24

APPENDIX Amendments to other pronouncements

APPROVAL BY THE BOARD OF IAS 10 ISSUED IN DECEMBER 2003
BASIS FOR CONCLUSIONS

International Accounting Standard 10 Events after the Reporting Period (IAS 10) is set out in paragraphs 124
and the Appendix. All the paragraphs have equal authority but retain the IASC format of the Standard when it
was adopted by the IASB. IAS 10 should be read in the context of its objective and the Basis for Conclusions,
the Preface to InternationalFinancial Reporting Standards and the Conceptual Framework for Financial
Reporting. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting
and applying accounting policies in the absence of explicit guidance.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Introduction
IN1 International Accounting Standard 10 Events after the Reporting Period (IAS 10)[1]replaces IAS 10
Events After the Balance Sheet Date (revised in 1999) and should be applied for annual periods
beginning on or after 1 January 2005. Earlier application is encouraged.

Reasons for revising IAS 10

IN2 The International Accounting Standards Board developed this revised IAS 10 as part of its project on
Improvements to International Accounting Standards. The project was undertaken in the light of
queries and criticisms raised in relation to the Standards by securities regulators, professional
accountants and other interested parties. The objectives of the project were to reduce or eliminate
alternatives, redundancies and conflicts within the Standards, to deal with some convergence issues
and to make other improvements.
IN3 For IAS 10 the Board's main objective was a limited clarification of the accounting for dividends
declared after the reporting period. The Board did not reconsider the fundamental approach to the
accounting for events after the reporting period contained in IAS 10.

The main changes

IN4 The main change from the previous version of IAS 10 was a limited clarification of paragraphs 12
and 13 (paragraphs 11 and 12 of the previous version of IAS 10). As revised, those paragraphs state
that if an entity declares dividends after the reporting period, the entity shall not recognise those
dividends as a liability at the end of the reporting period.
Footnotes
[1]
1 In September 2007 the IASB amended the title of IAS 10 from Events after the Balance Sheet Date to Events after the Reporting Period as a

consequence of the revision of IAS 1 Presentation of Financial Statements in 2007.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Objective
1

The objective of this Standard is to prescribe:

(a) when an entity should adjust its financial statements for events after the reporting period; and
(b) the disclosures that an entity should give about the date when the financial statements were
authorised for issue and about events after the reporting period.
The Standard also requires that an entity should not prepare its financial statements on a going
concern basis if events after the reporting period indicate that the going concern assumption is not
appropriate.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Scope
2

This Standard shall be applied in the accounting for, and disclosure of, events after the
reporting period.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Definitions
3

The following terms are used in this Standard with the meanings specified:
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
statements are authorised for issue. Two types of events can be identified:
(a) those that provide evidence of conditions that existed at the end of the reporting
period (adjusting events after the reporting period); and
(b) those that are indicative of conditions that arose after the reporting period (nonadjusting events after the reporting period).

The process involved in authorising the financial statements for issue will vary depending upon the
management structure, statutory requirements and procedures followed in preparing and finalising
the financial statements.

In some cases, an entity is required to submit its financial statements to its shareholders for approval
after the financial statements have been issued. In such cases, the financial statements are
authorised for issue on the date of issue, not the date when shareholders approve the financial
statements.

Example
The management of an entity completes draft financial statements for the year to 31 December 20X1 on 28
February 20X2. On 18 March 20X2, the board of directors reviews the financial statements and authorises them
for issue. The entity announces its profit and selected other financial information on 19 March 20X2. The
financial statements are made available to shareholders and others on 1 April 20X2. The shareholders approve
the financial statements at their annual meeting on 15 May 20X2 and the approved financial statements are
then filed with a regulatory body on 17 May 20X2.
The financial statements are authorised for issue on 18 March 20X2 (date of board authorisation for issue).
6

In some cases, the management of an entity is required to issue its financial statements to a
supervisory board (made up solely of non-executives) for approval. In such cases, the financial
statements are authorised for issue when the management authorises them for issue to the
supervisory board.

Example
On 18 March 20X2, the management of an entity authorises financial statements for issue to its supervisory
board. The supervisory board is made up solely of non-executives and may include representatives of
employees and other outside interests. The supervisory board approves the financial statements on 26 March
20X2. The financial statements are made available to shareholders and others on 1 April 20X2. The
shareholders approve the financial statements at their annual meeting on 15 May 20X2 and the financial
statements are then filed with a regulatory body on 17 May 20X2.
The financial statements are authorised for issue on 18 March 20X2 (date of management authorisation for
issue to the supervisory board).
7

Events after the reporting period include all events up to the date when the financial statements are

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

authorised for issue, even if those events occur after the public announcement of profit or of other
selected financial information.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Recognition and measurement

Adjusting events after the reporting period
8

An entity shall adjust the amounts recognised in its financial statements to reflect
adjusting events after the reporting period.

The following are examples of adjusting events after the reporting period that require an entity to
adjust the amounts recognised in its financial statements, or to recognise items that were not
previously recognised:
(a) the settlement after the reporting period of a court case that confirms that the entity had a
present obligation at the end of the reporting period. The entity adjusts any previously
recognised provision related to this court case in accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or recognises a new provision. The entity does not merely
disclose a contingent liability because the settlement provides additional evidence that would be
considered in accordance with paragraph 16 of IAS 37.
(b) the receipt of information after the reporting period indicating that an asset was impaired at the
end of the reporting period, or that the amount of a previously recognised impairment loss for
that asset needs to be adjusted. For example:

(c)

(i)

the bankruptcy of a customer that occurs after the reporting period usually confirms that a
loss existed at the end of the reporting period on a trade receivable and that the entity needs
to adjust the carrying amount of the trade receivable; and

(ii)

the sale of inventories after the reporting period may give evidence about their net realisable
value at the end of the reporting period.

the determination after the reporting period of the cost of assets purchased, or the proceeds
from assets sold, before the end of the reporting period.

(d) the determination after the reporting period of the amount of profit-sharing or bonus payments,
if the entity had a present legal or constructive obligation at the end of the reporting period to
make such payments as a result of events before that date (see IAS 19 EmployeeBenefits).
(e) the discovery of fraud or errors that show that the financial statements are incorrect.

Non-adjusting events after the reporting period

10

An entity shall not adjust the amounts recognised in its financial statements to reflect
non-adjusting events after the reporting period.

11

An example of a non-adjusting event after the reporting period is a decline in fair value of
investments between the end of the reporting period and the date when the financial statements are
authorised for issue. The decline in fair value does not normally relate to the condition of the
investments at the end of the reporting period, but reflects circumstances that have arisen
subsequently. Therefore, an entity does not adjust the amounts recognised in its financial statements
for the investments. Similarly, the entity does not update the amounts disclosed for the investments
as at the end of the reporting period, although it may need to give additional disclosure under
paragraph 21.

Dividends
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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

12

If an entity declares dividends to holders of equity instruments (as defined in IAS 32

Financial Instruments: Presentation) after the reporting period, the entity shall not
recognise those dividends as a liability at the end of the reporting period.

13

If dividends are declared after the reporting period but before the financial statements are
authorised for issue, the dividends are not recognised as a liability at the end of the reporting period
because no obligation exists at that time. Such dividends are disclosed in the notes in accordance
with IAS 1 Presentation of Financial Statements.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Going concern
14

An entity shall not prepare its financial statements 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.

15

Deterioration in operating results and financial position after the reporting period may indicate a
need to consider whether the going concern assumption is still appropriate. If the going concern
assumption is no longer appropriate, the effect is so pervasive that this Standard requires a
fundamental change in the basis of accounting, rather than an adjustment to the amounts recognised
within the original basis of accounting.

16

IAS 1 specifies required disclosures if:

(a) the financial statements are not prepared on a going concern basis; or
(b) management is aware of material uncertainties related to events or conditions that may cast
significant doubt upon the entity's ability to continue as a going concern. The events or conditions
requiring disclosure may arise after the reporting period.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Disclosure
Date of authorisation for issue
17

An entity shall disclose the date when the financial statements were authorised for
issue and who gave that authorisation. If the entity's owners or others have the power
to amend the financial statements after issue, the entity shall disclose that fact.

18

It is important for users to know when the financial statements were authorised for issue, because
the financial statements do not reflect events after this date.

Updating disclosure about conditions at the end of the reporting period

19

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.

20

In some cases, an entity needs to update the disclosures in its financial statements to reflect
information received after the reporting period, even when the information does not affect the
amounts that it recognises in its financial statements. One example of the need to update disclosures
is when evidence becomes available after the reporting period about a contingent liability that existed
at the end of the reporting period. In addition to considering whether it should recognise or change a
provision under IAS 37, an entity updates its disclosures about the contingent liability in the light of
that evidence.

Non-adjusting events after the reporting period

21

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 financial
statements. Accordingly, an entity shall disclose the following for each material category
of non-adjusting event after the reporting period:
(a) the nature of the event; and
(b) an estimate of its financial effect, or a statement that such an estimate cannot be
made.

22

The following are examples of non-adjusting events after the reporting period that would generally
result in disclosure:
(a) a major business combination after the reporting period (IFRS 3 BusinessCombinations requires
specific disclosures in such cases) or disposing of a major subsidiary;
(b) announcing a plan to discontinue an operation;
(c)

major purchases of assets, classification of assets as held for sale in accordance with IFRS 5
Non-current Assets Held for Sale and DiscontinuedOperations, other disposals of assets, or
expropriation of major assets by government;

(d) the destruction of a major production plant by a fire after the reporting period;
(e) announcing, or commencing the implementation of, a major restructuring (see IAS 37);
(f)

major ordinary share transactions and potential ordinary share transactions after the reporting
period (IAS 33 Earnings per Share requires an entity to disclose a description of such

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

transactions, other than when such transactions involve capitalisation or bonus issues, share
splits or reverse share splits all of which are required to be adjusted under IAS 33);
(g) abnormally large changes after the reporting period in asset prices or foreign exchange rates;
(h) changes in tax rates or tax laws enacted or announced after the reporting period that have a
significant effect on current and deferred tax assets and liabilities (see IAS 12 Income Taxes);
(i)

entering into significant commitments or contingent liabilities, for example, by issuing significant
guarantees; and

(j)

commencing major litigation arising solely out of events that occurred after the reporting period.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Effective date
23

An entity shall apply this Standard for annual periods beginning on or after 1 January 2005. Earlier
application is encouraged. If an entity applies this Standard for a period beginning before 1 January
2005, it shall disclose that fact.

23A AIFRS 13, issued in May 2011, amended paragraph 11. An entity shall apply that amendment when it
applies IFRS 13.

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Withdrawal of IAS 10 (revised 1999)

24

This Standard supersedes IAS 10 Events After the Balance Sheet Date (revised in 1999).

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Appendix Amendments to other pronouncements

The amendments in this appendix shall be applied for annual periods beginning on or after 1 January 2005. If an entity
applies this Standard for an earlier period, these amendments shall be applied for that earlier period.
*****
The amendments contained in this appendix when this Standard was revised in 2003 have been incorporated into the
relevant IFRSs published in this volume.
The text of the unaccompanied IAS 10 is contained in Part A of this edition. Its effective date when issued was 1 January
2005. The effective date of the most recent amendments is 1 January 2013. This part presents the following accompanying
documents:

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Approval by the Board of IAS 10 issued in December 2003

International Accounting Standard 10 Events after the Balance Sheet Date (as revised in 2003) was approved for issue by
the fourteen members of the International Accounting Standards Board.
Sir David Tweedie

Chairman

Thomas E Jones

Vice-Chairman

Mary E Barth
Hans-Georg Bruns
Anthony T Cope
Robert P Garnett
GilbertGlard
James J Leisenring
Warren J McGregor
Patricia L O'Malley
Harry K Schmid
John T Smith
Geoffrey Whittington
Tatsumi Yamada

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IAS 10 Events After the Reporting Period (IAS 10 - 2013)

IAS 10 - 2013

Basis for Conclusions on IAS 10 Events after the Reporting

[1]
Period
This Basis for Conclusions accompanies, but is not part of, IAS 10.

Introduction
BC1 This Basis for Conclusions summarises the International Accounting Standards Board's considerations
in reaching its conclusions on revising IAS 10 Events Afterthe Balance Sheet Date in 2003. Individual
Board members gave greater weight to some factors than to others.
BC2 In July 2001 the Board announced that, as part of its initial agenda of technical projects, it would
undertake a project to improve a number of Standards, including IAS 10. The project was
undertaken in the light of queries and criticisms raised in relation to the Standards by securities
regulators, professional accountants and other interested parties. The objectives of the
Improvements project were to reduce or eliminate alternatives, redundancies and conflicts within
Standards, to deal with some convergence issues and to make other improvements. In May 2002 the
Board published its proposals in an Exposure Draft of Improvements to International Accounting
Standards, with a comment deadline of 16 September 2002. The Board received over 160 comment
letters on the Exposure Draft.
BC3 Because the Board's intention was not to reconsider the fundamental approach to the accounting for
events after the balance sheet date established by IAS 10, this Basis for Conclusions does not discuss
requirements in IAS 10 that the Board has not reconsidered.

Limited clarification
BC4 For this limited clarification of IAS 10 the main change made is in paragraphs 12 and 13 (paragraphs
11 and 12 of the previous version of IAS 10). As revised, those paragraphs state that if dividends are
declared after the balance sheet date,[2]an entity shall not recognise those dividends as a liability at
the balance sheet date. This is because undeclared dividends do not meet the criteria of a present
obligation in IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The Board discussed
whether or not an entity's past practice of paying dividends could be considered a constructive
obligation. The Board concluded that such practices do not give rise to a liability to pay dividends.[3]
Footnotes
[1]
1 In September 2007 the IASB amended the title of IAS 10 from Events after the Balance Sheet Date to Events after the Reporting Period as a

consequence of the amendments in IAS 1 Presentation of Financial Statements (as revised in 2007).
[back]
[2]
2 IAS 1 Presentation of Financial Statements (as revised in 2007) replaced the term 'balance sheet date' with 'end of the reporting period'.
[back]

[3]
3 In 2007 the Board was advised that paragraph 13, taken in isolation, could be read to imply that a liability should be recognised in some

circumstances on the basis that a constructive obligation exists, such as when there is an established pattern of paying a dividend. Therefore,
the Board amended paragraph 13 by Improvements to IFRSs issued in May 2008 to state that no such obligation exists.
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