IAS 10 Events after the Reporting Period | Annualreporting.info

Natural disasters – Miscellaneous considerations

Future operating losses Natural disasters – Miscellaneous considerations

Entities may incur other losses directly or indirectly related to a natural disaster. An entity may anticipate having future operating losses for a period of time after a natural disaster. For example, an entity may have repair costs, lost revenue due to plant closures or losses due to an overall decline in the economy. Additional costs might be incurred in renting alternative production facilities, providing transport or accommodation for employees or outsourcing business functions.

Future operating losses and costs do not meet the definition of a liability (because they do not arise from a present obligation resulting of a past event), and therefore are not recognised until incurred.

Onerous contracts

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Events after the Reporting period

When should a reporting entity recognise events after the reporting period in the financial statements that are being finalised?

What are the disclosures that should be given about the date when the financial statements were authorised for issue and about the events after the reporting date?

The answers look a bit colorful but are spot on and short……

The events

The three important terms were it is all about are:

1. Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue.

2. Adjusting events are events occurring after the reporting date that provide evidence of conditions that existed Read more