CONCEPTUAL FRAMEWORK

&
ACCOUNTING STANDARDS
2020 Edition

Lecture Aid
By: Zeus Vernon B. Millan

1
PAS 10 Events after the Reporting Period

Learning Objectives
• Define events after the reporting period.
• State the accounting requirements for events after the
reporting period.

Conceptual Framework & Acctg. Standards (by: Zeus Vernon B. Millan) 2

Events after the Reporting Period

• Events after the reporting period are “those events, favorable

or unfavorable, that occur between the end of the reporting
period and the date that the financial statements are
authorized for issue.” (PAS 10)

Conceptual Framework & Acctg.

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Standards (by: Zeus Vernon B. Millan)
Two types of events after the reporting period

1. Adjusting events after the reporting period – are those that

provide evidence of conditions that existed at the end of the
reporting period.
2. Non-adjusting events after the reporting period – those that are
indicative of conditions that arose after the reporting period

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Standards (by: Zeus Vernon B. Millan)
Date of authorization of the financial statements

• This date is the date when management authorizes the financial

statements for issue regardless of whether such authorization for
issue is for further approval or for final issuance to users.

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Standards (by: Zeus Vernon B. Millan)
Examples of adjusting events:

1. The settlement after the reporting period of a court case that

confirms that the entity has a present obligation at the end of
reporting period.
2. The receipt of information after the reporting period indicating that
an asset was impaired at the end of reporting period. For example:
i. The bankruptcy of a customer that occurs after the reporting
period may indicate that the carrying amount of a trade
receivable at the end of reporting period is impaired.
ii. The sale of inventories after the reporting period may give
evidence to their net realizable value at the end of reporting
period

3. The determination after the reporting period of the cost of asset

purchased, or the proceeds from asset sold, before the end of
reporting period.
4. The discovery of fraud or errors that indicate that the financial
statements are incorrect .
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Standards (by: Zeus Vernon B. Millan)
Examples of non-adjusting events normally requiring disclosures:

1. Changes in fair values, foreign exchange rates, interest rates or market

prices after the reporting period.
2. Casualty losses (e.g., fire, storm, or earthquake) occurring after the
reporting period but before the financial statements were authorized for
issue.
3. Litigation arising solely from events occurring after the reporting period.
4. Major ordinary share transactions and potential ordinary share
transactions after the reporting period.
5. Major business combination after the reporting period.
6. Announcing a plan to discontinue an operation after the reporting
period.
7. Declaration of dividends after the reporting period
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Standards (by: Zeus Vernon B. Millan)
Disclosures

• Date of authorization for issue

• Adjusting events
• Material Non-adjusting events

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Standards (by: Zeus Vernon B. Millan)
 APPLICATION OF CONCEPTS
 

PROBLEM 2: FOR CLASSROOM DISCUSSION

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OPEN FORUM
QUESTIONS????
REACTIONS!!!!!

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Standards (by: Zeus Vernon B. Millan)
 END
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