IAS 10 – Event after the Balance Sheet Date
Objective: when an entity should adjust its financial statements for event after the balance sheet date, and the disclosures about the date, and about the event.
Event after the balance sheet date are those event that occur between the balance sheet date and the date when the financial statement are authorized for issue.
Adjusting Events: adjusting event adjust the financial statements to reflect those events that provide evidence of condition that existed at the balance sheet date. Such as resolution of court case. And a decline in the market prices of assets before year ended.
Non Adjusting Events: Non adjusting event do not adjust the financial statement to reflect events that arise after the balance sheet date such as a decline in the market prices of assets after year ended.
Dividends proposed or declared on equity after the balance sheet date should not be recognized as a liability at the balance sheet date, discloser is required.
An entity should not prepare its financial statement on a going concern basis if event after the balance sheet date, indicate that the going on concern assumption is not appropriate.
An entity must disclose the date its financial statements are authorized.
The Differences and Similarities between US GAAP Law and IFRS
Similarities: In both US GAAP and IFRS the financial statements are adjust to reflect events that occur after the reporting date if those event provide evidence of condition that existed at the reporting date. When in both the financial statements are not adjusted for event that are indicate of condition that arise after the reporting date. In Both US GAAP and IFRS liabilities classification as current or non-current reflects circumstances at the reporting date.
Significant Differences:
IFRS | US Law GAAP | |
Adjusting Event reflect those events that occur after the reporting date, but before the financial statements is authorized, If those events provide evidence of condition that existed at the reporting date. | Unlike the IFRS the period to consider such events goes beyond the date of authorization of the financial statement to the date that the statements are issued. Tax uncertainties are never Adjusting Events | Adjusting Events |
Financial statements are not adjusted for events that are indicated conditions that arise after the reporting date except when the going concern assumption no longer is appropriate. Dividend proposed or declared on equity after the balance sheet date should not adjusted the financial statements | Unlike IFRS there is no exception when the going concern assumption no longer appropriate, and the financial statement do no adjusted because of those events. SEC rules that the balance sheet should be adjusted as result of dividends. Proposed or declared on equity after the balance sheet date. | Non Adjusting Events |
Liabilities generally are classified as current or non- current based on the circumstance at the reporting date. | Unlike IFRS post reflects circumstances are considered in determining the classification of debt at the reporting date. Liabilities payable at the reporting date due to violations are classified as non-current. | Classification of liabilities |
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