International Accounting Standard 10 Events after the Reporting Period (IAS 10) is set out in paragraphs 1–24 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 IFRS 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. [ Refer: IAS 8 paragraphs 10–12]
The objective of this Standard is to prescribe:
when an entity should adjust its financial statements for events after the reporting period ; and
the disclosures that an entity should give about the date when the financial statements were authorised for issue [ Refer: paragraphs 4–6, 17 and 18] and about events after the reporting period [ Refer: paragraphs 19–22] .
The Standard also requires that an entity should not prepare its financial statements on a going concern [ Refer: paragraphs 14–16] basis if events after the reporting period [ Refer: paragraph 3 (definition of events after the reporting period)] indicate that the going concern assumption [ Refer: IAS 1 paragraphs 25 and 26] is not appropriate.
This Standard shall be applied in the accounting for, [ Refer: paragraphs 8–16] and disclosure of, [ Refer: paragraphs 17–22] events after the reporting period .
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. E1 [ Refer: paragraphs 4–6] Two types of events can be identified:
those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and
those that are indicative of conditions that arose after the reporting period (non‑adjusting events after the reporting period).
[IFRIC® Update, May 2013, Agenda Decision, ‘ IAS 10 Events after the Reporting Period —Reissuing previously issued Financial Statements’
The Interpretations Committee was asked to clarify the accounting implications of applying IAS 10 Events after the Reporting Period when previously issued financial statements are reissued in connection with an offering document. The issue arose in jurisdictions in which securities laws and regulatory practices require an entity to reissue its previously issued annual financial statements in connection with an offering document, when the most recently filed interim financial statements reflect matters that are accounted for retrospectively under the applicable accounting standards. In these jurisdictions, securities law and regulatory practices do not require or permit the entity, in its reissued financial statements, to recognise events or transactions that occur between the time the financial statements were first authorised for issued and the time the financial statements are reissued, unless the adjustment is required by national regulation; instead security and regulatory practices require the entity to recognise in its reissued financial statements only those adjustments that would ordinarily be made to the comparatives in the following year’s financial statements. These adjustments would include, for example, adjustments for changes in accounting policy that are applied retrospectively, but would not include changes in accounting estimates. This approach is called ‘dual dating’. The submitter asked the Interpretations Committee to clarify whether IAS 10 permits only one date of authorisation for issue (ie ‘dual dating’ is not permitted) when considered within the context of reissuing previously issued financial statements in connection with an offering document.
The Interpretations Committee noted that the scope of IAS 10 is the accounting for, and disclosure of, events after the reporting period and that the objective of this Standard is to prescribe:
when an entity should adjust its financial statements for events after the reporting period; and
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 Interpretations Committee also noted that financial statements prepared in accordance with IAS 10 should reflect all adjusting and non-adjusting events up to the date that the financial statements were authorised for issue.
The Interpretations Committee noted that IAS 10 does not address the presentation of re-issued financial statements in an offering document when the originally issued financial statements have not been withdrawn, but the re-issued financial statements are provided either as supplementary information or a re-presentation of the original financial statements in an offering document in accordance with regulatory requirements.
On the basis of the above and because the issue arises in multiple jurisdictions, each with particular securities laws and regulations which may dictate the form for re-presentations of financial statements, the Interpretations Committee decided not to add this issue to its agenda.]
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.
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).
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.
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).
Events after the reporting period include all events up to the date when the financial statements are authorised for issue, even if those events occur after the public announcement of profit or of other selected financial information.