IAS 10 : Introduction

1.      Introduction

Aim

The aim of this workbook is to provide an understanding of IAS 10, Events after the Balance Sheet Date.

SUMMARY

In most countries, events after the balance sheet date tend to be recorded in the notes to the financial statements, if at all. Without a standard framework the preparation of financial reports have lacked consistency.

IAS 10 details the post-balance-sheet events and how they should be recorded under IFRS.

Post-balance-sheet events happen during the period starting immediately after the balance sheet date and ending at the date of approval of the financial statements.

Establishing the exact date of approval is necessary to comply with the Standard.

There are 4 main types of material post-balance-sheet events:

1.     Dividends declared in this period after the balance sheet date, but before approval of the financial statements should be noted, but not shown as a liability, at the balance sheet date.

2.     If the company can no longer be considered a going-concern during this period, the financial statements should not be prepared on a going-concern basis.

3.     Events that were unknown, or unclear, at the balance sheet date. If more information becomes available, it may cause the financial statements to be adjusted.

4.     Conditions that arose after the balance sheet date should not adjust the financial statements, but should be suitably noted.

EXAMPLES- conditions that arose after the balance sheet date

These include major acquisitions and disposals, material changes to banking facilities financing the bank and new share issues. Such events should be noted.

If material events occur after the approval of financial statements, they should be communicated to users in an appropriate manner. Such events are not covered by IAS 10 as they occur after the approval of the financial statements.

Objective

The objective of the Standard is to prescribe adjustments and disclosures

for events after the balance sheet date.