Financial Reporting · Ind AS 10 Events after the Reporting Period

Non-adjusting Events and Disclosures under Ind AS 10

Updated 5 October 2026

A non-adjusting event is an event after the reporting period that reflects conditions arising after that date. You do not change the recognised amounts. You disclose its nature and an estimate of its financial effect, or a statement that no estimate can be made. To solve a question, test whether the condition existed at the reporting date.

Understand Non-adjusting Events and Disclosures

Ind AS 10 deals with events between the end of the reporting period and the date the financial statements are approved for issue. These events are favourable or unfavourable. The key question is always the same: did the condition exist at the reporting date, or did it arise afterwards?

If the event gives evidence of a condition that existed at the reporting date, it is an adjusting event. You change the amounts in the financial statements. If the event indicates a condition that arose after the reporting period, it is a non-adjusting event. You do not change the recognised amounts.

Why no adjustment? The financial statements show the position at the reporting date. A condition that did not exist then does not belong in that position. Adjusting for it would misstate the year-end balances.

But users still need to know about big events. So Ind AS 10 requires disclosure where the event is material, meaning non-disclosure could influence users' decisions. You disclose two things: the nature of the event and an estimate of its financial effect, or a statement that such an estimate cannot be made.

Typical examples are a major business combination after the reporting period, announcing a plan to discontinue an operation, major purchases of assets or classification of assets as held for sale, destruction of a major plant by fire after the reporting period, announcing or starting a major restructuring, major ordinary share transactions, abnormal changes in asset prices or foreign exchange rates, changes in tax rates enacted after the period, significant commitments or contingent liabilities, and major litigation arising from events after the period. A fall in the fair value of investments after the reporting period is the classic exam example. It usually reflects market conditions arising after the date, not the position at the year-end.

Key rules to remember

Adjusting vs non-adjusting test: Condition existed at reporting date → adjust. Condition arose after reporting date → do not adjust, disclose if material.; This single test decides almost every question.
Disclosure for each material non-adjusting event: Nature of the event + estimate of financial effect (or statement that an estimate cannot be made); Both parts are needed for full marks.
Period covered: Reporting date to the date the financial statements are authorised for issue; Ind AS 10 covers events up to the date the financial statements are authorised for issue. Events after that date are not reflected in those statements.
Disclosure of authorisation: Disclose the date of authorisation for issue and who gave it; If owners can amend the statements after issue, disclose that fact.
Going concern override: If operations are to cease or no realistic alternative exists, the going concern basis is no longer appropriate; Events are considered up to the authorisation date. This override applies even to events after the period. Where they show the going concern assumption is inappropriate, Ind AS 10 requires a change in the basis of accounting. This is not a non-adjusting event requiring only disclosure.

How to solve Non-adjusting Events and Disclosures questions

Use the same sequence for every Ind AS 10 question on non-adjusting events. Write each step in your answer so the examiner can award marks.

1Fix the dates: reporting date and date of approval for issue. Check the event falls between them.
2State what the event is and when its cause arose.
3Apply the test: did the condition exist at the reporting date? If the evidence only confirms an existing condition, it is adjusting.
4If the condition arose after the reporting date, conclude it is non-adjusting and say no change is made to recognised amounts.
5Check going concern: if events after the reporting period show the going concern assumption is inappropriate, it is not a non-adjusting event. Ind AS 10 requires a change in the basis of accounting.
6Check materiality. Disclose only if non-disclosure could influence users' decisions.
7Write the disclosure: nature of the event and estimate of financial effect, or state that no estimate can be made.
8Quote the amount in the disclosure, not in the books. Leave the year-end figures unchanged.

Quickest way: Two-question shortcut

When to use it: Use in MCQs and short case scenarios where you must classify an event in under a minute.

Ask: was the cause already there on the reporting date?
Yes: adjusting. No: non-adjusting.
For non-adjusting, note: no change in books, disclose nature and financial effect if material.
Watch for a trap: a market price fall after year-end is non-adjusting, but a customer insolvency caused by earlier conditions is adjusting.

Common mistakes in Non-adjusting Events and Disclosures

Adjusting the investment carrying amount for a market fall that happened after the reporting date.
Students see a loss and feel it must be booked.
Fix: Remember the balance sheet shows the reporting date position. Disclose the fall instead.
Disclosing the nature of the event but not its financial effect.
Students treat disclosure as a one-line mention.
Fix: Always add an estimate of the effect, or state that it cannot be estimated.
Treating every unfavourable event as adjusting.
Students focus on the sign of the event, not its timing.
Fix: Ignore good or bad news. Look only at when the condition arose.
Disclosing immaterial events.
Students over-disclose to be safe.
Fix: State the materiality test: disclose only if non-disclosure could influence users' decisions.
Ignoring the going concern effect of a severe event.
Students stop after classifying the event as non-adjusting.
Fix: Check whether the event, such as destruction of the main plant, threatens continuity. If events after the reporting period show the going concern assumption is inappropriate, Ind AS 10 requires a change in the basis of accounting. This is not treated as a non-adjusting event with disclosure only.
Confusing the reporting date with the date of approval.
Both dates appear in the case and look alike.
Fix: Underline both dates first and test the event against each.

Worked examples

Example 1

X Ltd (an Ind AS company) has a reporting date of 31 March 2027. Its financial statements were approved for issue on 20 May 2027. It holds quoted equity shares of another company carried at fair value of ₹80,00,000 at 31 March 2027. Because of a sudden market disturbance on 25 April 2027, their fair value fell to ₹62,00,000. Advise on the treatment.

Show the solution

Dates: reporting date is 31 March 2027. Approval date is 20 May 2027. The fall on 25 April 2027 lies between them, so Ind AS 10 applies.
Cause: the fall was due to market disturbance on 25 April 2027. The condition did not exist at 31 March 2027.
Classification: this is a non-adjusting event.
Recognition: do not change the ₹80,00,000 carrying amount at 31 March 2027.
Materiality: a fall of ₹18,00,000 (₹80,00,000 − ₹62,00,000) may be material depending on the size of the entity. Assume it is material.
Disclosure: state the nature of the event and disclose the estimated effect, for example ₹18,00,000, based on the fair value fall known at the date of approval.

Answer: Non-adjusting event. Keep investments at ₹80,00,000 in the 31 March 2027 statements. Disclose the nature of the fall and its estimated effect of ₹18,00,000, if material.

Example 2

Y Ltd closes its books on 31 March 2027, and the board approves the statements on 15 June 2027. On 10 May 2027, a fire destroyed a warehouse with inventory carrying ₹40,00,000, which was fully included in inventory at year-end. Insurance is expected to cover ₹30,00,000. On 5 June 2027, Y Ltd signed an agreement to acquire a competitor. Advise on the treatment of both events.

Show the solution

Both events happened after 31 March 2027 and before approval on 15 June 2027, so Ind AS 10 applies.
Fire: the inventory existed and was undamaged at the reporting date. The fire is a condition arising after that date. It is non-adjusting.
Do not write off the inventory in the 2026-27 books. Keep it at ₹40,00,000.
Recognition: because the fire is a non-adjusting event, nothing is recognised in the 2026-27 statements. No loss is booked and no insurance receivable is recorded.
Disclosure of the fire: disclose its nature and an estimate of its financial effect. The estimated gross financial effect is the loss of ₹40,00,000 (the carrying amount of the inventory destroyed).
Insurance recovery: the expected recovery of ₹30,00,000 is a possible inflow, so it is a contingent asset under Ind AS 37. Assuming the inflow is probable, mention it as a contingent asset disclosure. An insurance recovery is recognised as an asset only when it is virtually certain, and it is not recognised in the 2026-27 statements. Do not present a net effect of ₹10,00,000 as the required disclosure.
Acquisition: a major business combination after the reporting period is a non-adjusting event. No recognition in the 2026-27 statements.
Disclose the acquisition details required by Ind AS 10 for a business combination after the reporting period, if material, together with the information Ind AS 103 requires about it.

Answer: Both are non-adjusting events. Inventory stays at ₹40,00,000, and no acquisition, fire loss or insurance recovery is recognised in the 2026-27 statements. Disclose the nature of each event and its estimated financial effect. For the fire, disclose the gross estimated effect of ₹40,00,000. Mention the expected insurance recovery of ₹30,00,000 as a contingent asset under Ind AS 37, if the inflow is probable, and do not recognise it.

Exam tips

Begin every answer by stating both dates. Examiners reward this step.
Write the conclusion in provision-facts-conclusion form: rule, application to the facts, final treatment.
In MCQs, look for words like 'after the reporting date' linked to a market price, exchange rate or fire. These point to non-adjusting.
Always give both parts of the disclosure: nature and estimated financial effect.
In a case scenario, check if the question mixes adjusting and non-adjusting events. Treat each event separately.

Practice questions from Ind AS 10 Events after the Reporting Period

Non-adjusting Events and Disclosures: frequently asked questions

Is a fall in the fair value of investments after the reporting period adjusting?

No. It is normally a non-adjusting event because it reflects market conditions arising after the reporting date. You leave the year-end value unchanged and disclose the nature and estimated financial effect if material.

What must be disclosed for a non-adjusting event?

You disclose the nature of the event and an estimate of its financial effect. If you cannot estimate the effect, you state that. Disclosure is needed only for material events.

How is a non-adjusting event different from an adjusting event?

An adjusting event gives evidence of conditions that existed at the reporting date, so you change the recognised amounts. A non-adjusting event relates to conditions that arose afterwards, so you only disclose.

Can an event after the reporting period change the basis of preparing the statements?

Yes, in one case. If events after the reporting period show that the entity will be liquidated, must cease trading or has no realistic alternative, the going concern assumption is inappropriate. Ind AS 10 then requires a change in the basis of accounting. This is not treated as a non-adjusting event requiring only disclosure.