CMA Intermediate · Corporate Accounting and Auditing

Events after the Reporting Period (Ind AS 10) for CMA Inter

Ind AS 10 deals with events between the end of the reporting period and the date the financial statements are approved for issue. Adjusting events give evidence of conditions that existed at the period end, so you change the amounts. Non-adjusting events arose afterwards, so you only disclose them if material.

What this chapter covers

This chapter covers one standard, Ind AS 10. It tells you how to treat favourable or unfavourable events that happen after the balance sheet date but before the financial statements are approved for issue. The key skill is classification. You read a short fact pattern and decide: does it confirm a condition that already existed at the period end, or did the condition arise later?

The chapter has four parts. First, the objective, scope and definitions, including the two time points that define the window. Second, adjusting events, where you change recognised amounts. Third, non-adjusting events, where you disclose the nature and the estimated financial effect, or a statement that no estimate can be made. Fourth, dividends declared after the period and the going concern rule, which can override the whole basis of preparation.

It connects to the rest of Corporate Accounting and Auditing. Final accounts under Schedule III, provisions and contingencies, and impairment of receivables and inventory all feed into adjusting events. In auditing, the auditor's duties on subsequent events and going concern use the same ideas. Treat this as a short, scoring chapter that also supports your answers elsewhere in the paper.

This chapter is compact, and most questions follow a repeatable pattern, so it pays back the effort quickly. It suits Section A multiple choice questions because a one-line fact pattern tests a single classification rule. It also appears in written answers as a list of events to classify, with the accounting entry or disclosure for each. Students who learn the test and the standard examples can pick up marks with little calculation, and the same logic helps you in provisions, final accounts and audit-related questions.

Events after the Reporting Period (Ind AS 10): topics in the order to study them

1Ind AS 10 Objective, Scope and Key DefinitionsYou need the reporting date, the approval date and the meaning of the two event types before you can classify anything.
2Adjusting Events after the Reporting PeriodThis is the core of the chapter and carries the accounting entries, so learn it once the definitions are clear.
3Non-Adjusting Events and DisclosuresIt is easiest to learn by contrast with adjusting events, and the disclosure wording is needed for written answers.
4Dividends and Going Concern after the Reporting PeriodThese are special rules that build on the earlier classification, so study them last and practise mixed questions.

How to prepare Events after the Reporting Period (Ind AS 10)

Aim to classify quickly and correctly, then write the entry or disclosure in a clean format. Short, repeated practice works better than one long reading.

Fix the timeline in your mind: reporting date, then approval for issue date. Only events between the two are in scope.
Learn the one-line test: does the event provide evidence of a condition that existed at the reporting date? If yes, adjusting. If no, non-adjusting.
Make a two-column list of standard examples, such as settlement of a court case or a customer's insolvency against a fire, a share issue or a major acquisition after the period end.
For each adjusting example, write the journal entry or the changed figure, so you can show step marks in a written answer.
Memorise the disclosure points for non-adjusting events: nature of the event and an estimate of its financial effect, or a statement that an estimate cannot be made.
Practise mixed fact patterns, including dividends proposed after the period and cases where the entity is no longer a going concern.
Finish with timed Section A style questions and note every reason you got one wrong.

Common mistakes in Events after the Reporting Period (Ind AS 10)

Classifying an event by whether it is good or bad news instead of by when the condition arose.
Fix: Apply the test every time: did the condition exist at the reporting date? Only then adjust.
Adjusting the accounts for a non-adjusting event such as a fire or a major share issue after the period end.
Fix: Size does not decide treatment. Disclose material non-adjusting events and leave recognised amounts unchanged.
Recording a dividend declared after the period as a liability in the closing balance sheet.
Fix: The obligation does not exist at the reporting date, so do not recognise it. Disclose it where required.
Using the wrong cut-off, such as the date of the AGM or the auditor's report instead of the date the financial statements are approved for issue (by the board).
Fix: Underline the reporting date and the approval date in the question and test each event against them.
Writing only the classification with no entry or disclosure wording.
Fix: State the class, give the reason in one line, then show the changed figure or the disclosure points.
Ignoring the going concern override when management decides to liquidate after the period.
Fix: Check whether the event changes the going concern assumption. If it does, the financial statements are not prepared on that basis.

Last-day revision: Events after the Reporting Period (Ind AS 10)

Window: from the end of the reporting period to the date the financial statements are approved for issue.
Adjusting events give evidence of conditions that existed at the end of the reporting period.
Non-adjusting events indicate conditions that arose after the reporting period.
Adjust recognised amounts for adjusting events; do not adjust for non-adjusting events.
Court case settled after the period, confirming a present obligation at the period end, is an adjusting event.
Bankruptcy of a customer after the period, confirming a receivable was already impaired, is adjusting.
A fall in market value of investments after the period is non-adjusting, as it reflects later market changes.
Disclose for material non-adjusting events: nature and estimate of financial effect, or that no estimate can be made.
Dividends declared after the reporting period are not recognised as a liability at that date.
If management decides after the period to liquidate or cease trading, do not use the going concern basis.
Always check whether an event is material before deciding on disclosure.
Read the approval date in the question carefully, because events after it are outside the standard.

Events after the Reporting Period (Ind AS 10) practice questions

Events after the Reporting Period (Ind AS 10) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Events after the Reporting Period (Ind AS 10): frequently asked questions

What is the difference between adjusting and non-adjusting events in Ind AS 10?

An adjusting event gives evidence of a condition that existed at the end of the reporting period, so you change the recognised amounts. A non-adjusting event relates to a condition that arose after that date, so you only disclose it if it is material.

Which dates matter for Ind AS 10?

The two dates are the end of the reporting period and the date the financial statements are approved for issue. Only events between them are treated as events after the reporting period.

Is a dividend declared after the reporting period a liability?

No. The entity has no obligation to pay it at the reporting date, so it is not recognised as a liability then. Read the question for any disclosure the answer needs.

How do I answer a classification question in the exam?

Name the event type, give a one-line reason based on whether the condition existed at the reporting date, and then show the adjustment or the disclosure. This gives clear step marks even when the question is short.