IFRS

1. .
IAS 10
Events after the Reporting Period

2. Overview
 OBJECTIVE
 SCOPE
 DEFINITIONS
 RECOGNITION AND MEASUREMENT
 Adjusting events after the reporting period
 Non-adjusting events after the reporting period
 Dividends
 Going Concern
 DISCLOSURE

3. OBJECTIVE
 .
To determine whether the financial
statement should adjust
• .
To prescribe the disclosure requirement
• .

4. SCOPE
.
The Standard shall be applied in
the accounting for, and disclosure
of, events after the reporting
period.

5. Definitions
. Events after the reporting period :-are those
events, favorable and unfavorable, that occur
between the end of the reporting period and the
date when the financial statements are
authorized for issue. Two types of events can be
identified:
(a) those that provide evidence of
conditions that existed at the end of
the reporting period (adjusting
events after the reporting period);
and
(b) those that are indicative of
conditions that arose after the
reporting period (non-adjusting
events after the reporting period).

6. Time line
 .
Year End
(June 30)
Date of authorization
(September 30)
Date of issue
(October 30)

7. Recognition And
Measurement
Adjusting events after the reporting period
An entity shall adjust the amounts
recognized in its financial
statements to reflect adjusting
events after the reporting period.

8. continued
examples of adjusting events occurs at the end of the reporting
period :-
.
(a) a court
case that
confirms that
the entity
had a
present
obligation
.
(b) the
receipt of
information
after the
reporting
period
indicating
that an asset
was
impaired
.
c)the
determinatio
n of the
amount of
profit-
sharing or
bonus
payments.

9. continued
Non-adjusting events after the reporting period
 An entity shall not adjust the amounts recognized in its financial
statements to reflect non-adjusting events after the reporting
period.
 If the event is material disclose it.

10. continued
 examples of non-adjusting events after the reporting period:-
(a) a major business combination
(a) announcing a plan to discontinue an operation
(a) major purchases of assets, classification of asset under IFRS 5
(d) the destruction of a major production plant by a Fire
(e) announcing, or commencing a major restructuring
(f) changes in tax rates or tax laws

11. Dividends
 If dividends are declared after the reporting period but before the financial
statements are authorized for issue, the dividends are not recognized as a
liability at the end of the reporting period because no obligation exists at that
time
continued

12. Going Concern
 An entity shall not prepare its financial statement on a going concern basis if
management determines after the reporting period either that intends to e
liquidate the entity or to cease trading or that it has no realist alternative but
to do so.
continued

13. Disclosure
The following should be disclosed
(a) Date of authorization for issue
(b) The nature of the event
(c) An estimate of its financial effect

14. Thank You

15. Questions and
Discussion

16. Case study 1
 Facts
The preparation of the financial statements of ethio telecom for the accounting
period ended June 30, 2017, was completed by the management on September 15,
2017. The draft financial statements were considered at the meeting of the board of
directors held on September 20, 2017, on which date the board approved them and
authorized them for issuance. Meeting with the ministry of transport was held on
October 10, 2017, after allowing for printing and the requisite notice period
mandated by the corporate statute. At the meeting the ministry approved the
financial statements. The approved financial statements were filed by the
corporation with Accounting and Auditing Board of Ethiopia on October 20, 2017.
 Required
Given these facts, what is the “authorization date” in terms of IAS 10?

17. Case study 2
 Facts
Suppose in the above-cited case, the management of ethio telecom was
required to issue the financial statements to an advisory board (consisting
solely of representatives of a trade union, employees and financial analyst).
The management of ethio telecom had issued the draft financial statements to
the supervisory board on September 16, 2017. The supervisory board
approved them on September 17, 2017, and the ministry approved them in a
meeting held on October 10, 2017. The approved financial statements were
filed with the Accounting and auditing board of Ethiopia on October 20, 2017.
 Required
Would the new facts have any effect on the date of authorization?

18. Case study 3
 Facts
During the year 2015, ethio telecom was sued by a customer for 15 million for breach of
contract. Based on the advice of the company’s legal counsel, ethio telecom accrued
the sum of 10 million as a provision in its financial statements for the year ended June
30, 2015. Subsequent to the Statement of financial position date, on August 15, 2015,
the sitting Court decided in favor of the party alleging breach of contract and ordered
ethio telecom to pay the aggrieved party a sum of 14 million. The financial statements
were prepared by the company’s management on July 31, 2015, and approved by the
board on August 20, 2015.
 Required
Should ethio telecom adjust its financial statements for the year ended June 30, 2015?

19. Case study 4
 Facts
ethio telecom carries its inventory at the lower of cost and net realizable value. At June
30, 2015, the cost of inventory, determined under the first-in, first-out (FIFO) method,
as reported in its financial statements for the year then ended, was 10 million. Due to
recession and other negative economic trends in the market, the inventory could not be
sold during the entire month of July 2016. On August 10, 2016, ethio telecom entered
into an agreement to sell the entire inventory for 6 million.
 Required
Presuming the financial statements were authorized for issuance on August 15, 2016,
should ethio telecom recognize a write-down of 4 million in the financial statements for
the year ended December 31, 2015?

20. Case study 5
 Facts
The statutory audit of ethio telecom for year ended June 30, 2015, was completed on August 30,
2015. The financial statements were signed by the CEO on September 8, 2015, and approved by
the Ministry on October 10, 2015. The next events have occurred.
(1) On July 15, 2015, a customer owing 900,000 to ethio telecom filed for bankruptcy. The financial
statements include an allowance for doubtful debts pertaining to this customer only of 50,000.
(2) ethio telecom’s issued additional capital comprised 100,000 equity shares.
(3) Specialized equipment costing 545,000 purchased on March 1, 2015, was destroyed by fire on
June 13, 2015. On June 30, 2015, ethio telecom has booked a receivable of 400,000 from the
insurance company pertaining to this claim. After the insurance company completed its
investigation, it was discovered that the fire took place due to negligence of the machine
operator. As a result, the insurer’s liability was zero on this claim by ethio telecom
 Required
How should ethio telecom account for these three post– end of the reporting period events?