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

Orion Steels Ltd closed its books on 31 March 2027. On 10 May 2027, before the Board approved the statements, a major production plant was destroyed by fire, and a plan to discontinue an operation was announced. How does Ind AS 10 treat these?

Both are non-adjusting events that would generally result in disclosure. The fire and the plan to discontinue an operation indicate conditions arising after the reporting period, so amounts in the 2026-27 statements are not adjusted.

  1. AAdjusting events, so the plant is written off in the 2026-27 statements
  2. BNon-adjusting events that would generally result in disclosureCorrect
  3. CEvents to be ignored since they occurred after 31 March 2027
  4. DAdjusting events only if the plant was insured

Explanation

Destruction of a major production plant by fire after the reporting period and announcing a plan to discontinue an operation are listed as non-adjusting events. They indicate conditions that arose after the reporting period, so they are generally disclosed rather than recognised. Insurance does not make them adjusting.

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