Download Quick Reference on Ind AS 10 Events after the Reporting Period
There is always a time lag between the end of the reporting period and the date on which the financial statements are approved for issue. Thus, a question arises should the events that occur between the said two dates have an impact on the financial statements. If yes, to what extent? How should these be reflected? Should these be disclosed? Indian Accounting Standard (Ind AS) 10 provides guidance on these and similar issues.
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 approved for issue and about events after the reporting period.
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 approved by the Board of Directors in case of a company, and, by the corresponding approving authority in case of any other entity for issue. Two types of events can be identified:
- Adjusting events after the reporting period – those that provide evidence of conditions that existed at the end of the reporting period.
- Non-adjusting events after the reporting – those that are indicative of conditions that arose after the reporting.