Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Events after the Reporting Period (Ind AS 10)

Ganga Pharma Ltd. closes its books on 31 March. Before the Board approved the accounts, the following occurred: (i) a bonus issue of shares was declared after the reporting period, (ii) a major ordinary share issue to a strategic investor was completed, (iii) an abnormally large rupee depreciation took place. For EPS and disclosure purposes under Ind AS 10 and the Ind AS 33 reference in it, which statement is correct?

The bonus issue is adjusted under Ind AS 33, whereas a major ordinary share issue and an abnormally large exchange rate change after the reporting period are non-adjusting events, which are generally disclosed without adjusting recognised amounts.

  1. AAll three are only disclosed, and none affects the EPS computation
  2. BThe bonus issue is adjusted for in EPS under Ind AS 33, while the major share issue and the abnormal exchange rate change are non-adjusting events generally disclosedCorrect
  3. CThe major share issue is adjusted in EPS, while the bonus issue is only disclosed
  4. DThe exchange rate change is adjusted in the recognised amounts, while the other two are disclosed

Explanation

Ind AS 10 says major ordinary share transactions are disclosed, other than capitalisation or bonus issues, share splits or reverse splits, which Ind AS 33 requires to be adjusted. Abnormally large changes in foreign exchange rates after the reporting period are non-adjusting events and are disclosed. Thus option 2 alone matches; the other options mistreat the share issue or the exchange rate change.

Did you get it right without looking?

One question tells you little. A timed set on Events after the Reporting Period (Ind AS 10) shows your real accuracy, how long you take and where you lose marks.

Practise Events after the Reporting Period (Ind AS 10)Free diagnostic mock

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