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FAC3701 2012

FAC3701 2012. EVENTS AFTER THE REPORTING PERIOD IAS 10. EVENTS AFTER THE REPORTING PERIOD. STUDY OBJECTIVES: NOTION OF ‘EVENTS AFTER REPORTING DATE’ ADJUSTING EVENTS NON-ADJUSTING EVENTS GOING CONCERN DIVIDENDS DISCLOSURE. 1. NOTION OF ‘EVENTS AFTER REPORTING DATE.

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FAC3701 2012

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  1. FAC37012012 EVENTS AFTER THE REPORTING PERIOD IAS 10

  2. EVENTS AFTER THE REPORTING PERIOD STUDY OBJECTIVES: • NOTION OF ‘EVENTS AFTER REPORTING DATE’ • ADJUSTING EVENTS • NON-ADJUSTING EVENTS • GOING CONCERN • DIVIDENDS • DISCLOSURE

  3. 1. NOTION OF ‘EVENTS AFTER REPORTING DATE 1.1 Focus is here! Beg of end of FS authorised reporting reporting for period period issue 1.2 Meaning of ‘authorised for issue’ 1.3 Events may be ‘adjusting’ or ‘non-adjusting’ • ie may or may not adjust amounts in FS

  4. 2. ADJUSTING EVENTS 2.1 Adjusting events are events that provide evidence of conditions that existed at the end of the reporting date. therefore adjust the amounts recognised in FS 2.2 Examples of adjusting events! • IAS 10; paragraph 9

  5. 3. NON-ADJUSTING EVENTS 3.1 Non-adjusting events are events that are indicative ofconditions that arose after the reporting date. therefore do not adjust the amounts recognised in FS 3.2 Examples of non-adjusting events! • IAS 10; paragraph 22 (Pg 133 Figure 7 Discr Acc. 15th ed.)

  6. 4. GOING CONCERN 4.1 Entity shall not prepare FS on going concern basis if management determines after the reporting period :- • to liquidate the entity, or • to cease trading, or • that there is no realistic alternative but to do so 4.2 Deteriorating operating results or financial position after year end may bring the going concern assumption into question • effect may be so pervasive so as to require a change in the basis of accounting • eg. use liquidation/exit values 4.3 Specific IAS1 requirements!!!!

  7. 5. DIVIDENDS 5.1 If dividend declared after reporting period • cannot recognise as liability at reporting date • why? NB. that declaration of dividend triggers a liability • but disclosure required 5.2 What if dividend declared on redeemable preference shares after year end?

  8. 6. DISCLOSURE 6.1 Date of authorisation for issue • And who gave that authorisation 6.2 Update disclosure about conditions at end of reporting period • even if information does not affect amounts • eg. update disclosures for a contingent liability 6.3 Disclosure required for each material category of non-adjusting event: • nature of the event • estimate of its financial effect • or state that such estimate cannot be made.

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