EVENTS AFTER THE BALANCE SHEET DATE

3/22/2009 1IAS 10

Prescribe adjustments and disclosures required for events that occur after the balance sheet date but before financial statements are authorised for issue

To state that financial statements should not be prepared on the going concern basis if events after the balance sheet date indicate that it is no longer a going concern

3/22/2009 2IAS 10

Events after the balance sheet date: ◦ Occur between balance sheet date and date

authorised for issue

◦ Adjusting events: Provide evidence of conditions that exist at the balance sheet date

◦ Non-adjusting events: Indicate conditions that arose after the balance sheet date

◦ Date of authorisation: Date accounts are issued to shareholders, not the date of approval by shareholders or supervisory board regardless of public announcements

3/22/2009 3IAS 10

Adjusting events Non-adjusting events

Confirmation of existence of the following at the balance sheet date are adjusted:◦ Liability at settlement of court case ◦ Disclosed contingent liability (IAS 37)◦ Impaired asset or that impairment

loss should be reversed◦ Bankruptcy of customer with trade

receivable balance◦ Sale of inventories to confirm NRV◦ Discovery of fraud or errors◦ Confirmation of cost of asset

purchased or proceeds at sale ◦ Bonus accrual out of legal or

constructive obligation

Events that happen after balance sheet date may require disclosure but are no adjusted e.g.:◦ Decline in market value of

investments◦ Dividends declared after

balance sheet date do not meet present obligation criteria of IAS 37 (disclose in notes per IAS 1)

3/22/2009 4IAS 10

Do not prepare financial statements on a going concern basis if management decides to liquidate or cease trading , or has no realistic alternative but to do so, after the balance sheet date

Follow IAS 1 disclosures for◦ FS not prepared on going concern basis

◦ Material uncertainties or significant doubt about ability to continue as a going concern

3/22/2009 5IAS 10

Date when financial statement are authorised for issue Person who gave authorisation If anyone has the power to amend financial statements after issue Disclosures about conditions at balance sheet date must be updated

(e.g. contingent liabilities) Material non-adjusting events:

◦ Nature of event◦ Estimate of financial effect or statement that estimate cannot be made

IFRS 3 major business combination

Plan to discontinue an operation

Major asset purchases or sales

Classification of major asset held for sale per IFRS 5

Major destruction by fire

Major restructuring (IAS 37)

Major ordinary share transaction (IAS 33)

Abnormal changes in foreign exchange rates or asset prices

Changes in tax rates of major deferred tax assets and liabilities (IAS 12)

Commitments, contingent liabilities and significant guarantees

Commencing major litigation

3/22/2009 6IAS 10

Financial statements are adjusted for events that occur after the balance sheet date that confirm conditions that exist at the balance sheet date

Financial statements are not adjusted for events that confirm conditions that occurred after the balance sheet date, but if material, they are disclosed

If an entity ceases to be a going concern due to events after the balance sheet date, the financial statements are not prepared on the going concern basis

No adjustments are made after the financial statements are authorised for issue to shareholders or supervisory boards, and this date is disclosed

3/22/2009 7IAS 10