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Chapter 15

IAS 10 Events after the reporting period

IAS 10 defines events after the reporting period as ‘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’ (IAS 10, Para 3).

The purpose of IAS 10 is to define to what extent events that occur after the reporting
period should be recognised in the financial statements.

IAS 10 distinguishes between events after the reporting date as either adjusting
events or non-adjusting events.

 Adjusting events – those material events which provide additional evidence of
conditions already in existence at the reporting date. The financial statements
should be adjusted to include the effect of such events.

 Non-adjusting events – those material events which do not concern conditions
existing at the reporting date. The financial statements should not be adjusted
but disclosure by note of these events should be made if it is considered
important to users’ understanding.

The following are examples of adjusting and non-adjusting events:

Adjusting events Non-adjusting events

1 Discovery of errors or fraud that Fluctuations in tax/exchange rates
occurred during the reporting period
2 Resolution of an insurance claim or Issue of shares
court case that confirms an obligation
at the reporting date
3 Major customers going into Fire or flood after the reporting date
liquidation

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