CHAPTER U

BLUE NOTES
43 S
L
Events after the Reporting Period, Definition
 Favorable and unfavorable events that occur between the end of the reporting period and the date when
the financial statements are authorized for issue.
 Also known as Subsequent Events
Date when the Financial Statement are Authorized for Issue
 When the Board of Directors reviews the financial statements and authorizes them for issue.
 When the Management authorizes the financial statements for issue, if the entity is required to issue its
financial statements to a supervisory board.

Types of Events after the Reporting Period

Type ADJUSTING EVENTS (TYPE I) NONADJUSTING EVENTS (TYPE II)
Events that provide evidence of conditions Events that are indicative of conditions that
Definition
that exist at the end of reporting period. arise after the end of the reporting period.
Treatment Adjustment Disclosure
Resolution after the reporting period of Business combination after the reporting
Examples
the court case. period
Bankruptcy of a customer after the
Plan to discontinue an operation
reporting period.
Sale of inventories after the reporting Major purchase and disposal of asset or
period expropriation of major asset by government.
Determination after the reporting period
of the cost of asset purchased or the Destruction of a major production plant by a
proceeds from the asset sold before the plant after the reporting period.
reporting date.
Major ordinary share transactions and
Discovery of fraud or errors that show the
potential ordinary share transactions after the
financial statements were incorrect.
reporting period.
Announcing or commencing the
implementation of a major restructuring.
Commencing major litigation arising solely
from events that occurred after the reporting
period.

Theory of Accounts Practical Accounting 1