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Event After The Reporting Date: Requirement

The document discusses accounting standards regarding adjusting and non-adjusting events after a reporting period. It notes that the coronavirus outbreak in Wuhan was first reported in December 2019, but it was not declared a global health emergency by WHO until January 2020. For an interim financial statement dated April 12th 2020, the lockdown ordered on March 24th would be considered an adjusting event, as the order was already in place. But for a full-year financial statement ending June 31st 2020, significant events after that date relating to the outbreak's widespread economic impact would also need to be treated as adjusting events. Any refinancing, amendments or waivers agreed with lenders after the reporting date should be disclosed as non-adjusting events

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30 views

Event After The Reporting Date: Requirement

The document discusses accounting standards regarding adjusting and non-adjusting events after a reporting period. It notes that the coronavirus outbreak in Wuhan was first reported in December 2019, but it was not declared a global health emergency by WHO until January 2020. For an interim financial statement dated April 12th 2020, the lockdown ordered on March 24th would be considered an adjusting event, as the order was already in place. But for a full-year financial statement ending June 31st 2020, significant events after that date relating to the outbreak's widespread economic impact would also need to be treated as adjusting events. Any refinancing, amendments or waivers agreed with lenders after the reporting date should be disclosed as non-adjusting events

Uploaded by

bkoi builders
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1.

Event after the reporting date

Requirement

NAS 10 Event after the reporting period requires to adjust entity’s financial statements for
adjusting events after the end of the reporting period and states that no adjustment in financial
statements is required for non-adjusting events after the end of reporting period.
Adjusting events are those events that provides further evidence of conditions that existed at the
end of the reporting period
And non-adjusting events are the events that are indicative of the conditions that arose after the
end of the reporting period.

Analysis of the situation

Although Wuhan Municipal Health Committee issued an urgent notice about the virus on 30
December 2019 and cases were reported to WHO on 31 December 2019. However, the
announcement by WHO that the coronavirus was a global health emergency was made on 30
January 2020 only. And Nepal government issued an order to enforce nationwide lockdown on
10th Chaitra 2076 i.e. 24th march 2020.

Recommendation

For interim financial statement having reporting date on Chaitra end (12th April 2020), the
outbreak of the pandemic shall be considered as adjusting event as the order of lockdown was
already issued on reporting date. As far as the end of the end of the financial year is concerned,
widespread impact of the outbreak is already perceived by the economy so any significant event
arising after 31st Ashad 2077, shall also have to be considered as adjusting event.
If any refinancing, amendments or waivers are agreed with the lenders after the reporting date
that shall be disclosed as non-adjusting events.

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