IAS 10

International Accounting Standard 10

Events after the Balance Sheet Date

This version includes amendments resulting from IFRSs issued up to 31 December 2006.
IAS 10 Events After the Balance Sheet Date was issued by the International Accounting Standards Committee in May
1999. It replaced those parts of IAS 10 Contingencies and Events Occurring After the Balance Sheet Date (originally
issued June 1978, reformatted 1994) that were not replaced by IAS 37 (issued September 1998).
In April 2001 the International Accounting Standards Board (IASB) resolved that all Standards and Interpretations issued
under previous Constitutions continued to be applicable unless and until they were amended or withdrawn.
In December 2003 the IASB issued a revised IAS 10 with a modified title—Events after the Balance Sheet Date.
IAS 10 was amended by IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations (issued March 2004).
The following Interpretation refers to IAS 10:
• SIC-7 Introduction of the Euro (issued May 1998, amended December 2003).

© IASCF 1
IAS 10

CONTENTS
paragraphs
INTRODUCTION IN1–IN4
INTERNATIONAL ACCOUNTING STANDARD 10
EVENTS AFTER THE BALANCE SHEET DATE
OBJECTIVE 1
SCOPE 2
DEFINITIONS 3–7
RECOGNITION AND MEASUREMENT 8–13
Adjusting events after the balance sheet date 8–9
Non-adjusting events after the balance sheet date 10–11
Dividends 12–13
GOING CONCERN 14–16
DISCLOSURE 17–22
Date of authorisation for issue 17–18
Updating disclosure about conditions at the balance sheet date 19–20
Non-adjusting events after the balance sheet date 21–22
EFFECTIVE DATE 23
WITHDRAWAL OF IAS 10 (REVISED 1999) 24
Appendix 
Amendments to other pronouncements
APPROVAL OF IAS 10 BY THE BOARD
BASIS FOR CONCLUSIONS

2 © IASCF
 IAS 10

International Accounting Standard 10 Events after the Balance Sheet Date (IAS 10) is set out in paragraphs 1–24 and the
Appendix. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the
IASB. IAS 10 should be read in the context of its objective and the Basis for Conclusions, the Preface to International
Financial Reporting Standards and the Framework for the Preparation and Presentation of Financial Statements. IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting
policies in the absence of explicit guidance.

© IASCF 3
IAS 10

Introduction
IN1 International Accounting Standard 10 Events after the Balance Sheet Date (IAS 10) replaces IAS 10 Events After
the Balance Sheet Date (revised in 1999) and should be applied for annual periods beginning on or after 1
January 2005. Earlier application is encouraged.

Reasons for revising IAS 10

IN2 The International Accounting Standards Board developed this revised IAS 10 as part of its project on
Improvements to International Accounting Standards. The project was undertaken in the light of queries and
criticisms raised in relation to the Standards by securities regulators, professional accountants and other
interested parties. The objectives of the project were to reduce or eliminate alternatives, redundancies and
conflicts within the Standards, to deal with some convergence issues and to make other improvements.
IN3 For IAS 10 the Board’s main objective was a limited clarification of the accounting for dividends declared after
the balance sheet date. The Board did not reconsider the fundamental approach to the accounting for events after
the balance sheet date contained in IAS 10.

The main changes

IN4 The main change from the previous version of IAS 10 was a limited clarification of paragraphs 12 and 13
(paragraphs 11 and 12 of the previous version of IAS 10). As revised, those paragraphs state that if an entity
declares dividends after the balance sheet date, the entity shall not recognise those dividends as a liability at the
balance sheet date.

4 © IASCF
 IAS 10

International Accounting Standard 10

Events after the Balance Sheet Date

Objective
1 The objective of this Standard is to prescribe:
(a) when an entity should adjust its financial statements for events after the balance sheet date; and
(b) the disclosures that an entity should give about the date when the financial statements were authorised
for issue and about events after the balance sheet date.
The Standard also requires that an entity should not prepare its financial statements on a going concern basis if
events after the balance sheet date indicate that the going concern assumption is not appropriate.

Scope
2 This Standard shall be applied in the accounting for, and disclosure of, events after the balance sheet date.

Definitions
3 The following terms are used in this Standard with the meanings specified:
Events after the balance sheet date are those events, favourable and unfavourable, that occur between the
balance sheet date and the date when the financial statements are authorised for issue. Two types of events
can be identified:
(a) those that provide evidence of conditions that existed at the balance sheet date (adjusting events
after the balance sheet date); and
(b) those that are indicative of conditions that arose after the balance sheet date (non-adjusting
events after the balance sheet date).
4 The process involved in authorising the financial statements for issue will vary depending upon the management
structure, statutory requirements and procedures followed in preparing and finalising the financial statements.
5 In some cases, an entity is required to submit its financial statements to its shareholders for approval after the
financial statements have been issued. In such cases, the financial statements are authorised for issue on the date
of issue, not the date when shareholders approve the financial statements.

Example
The management of an entity completes draft financial statements for the year to 31 December 20X1 on 28
February 20X2. On 18 March 20X2, the board of directors reviews the financial statements and authorises them
for issue. The entity announces its profit and selected other financial information on 19 March 20X2. The
financial statements are made available to shareholders and others on 1 April 20X2. The shareholders approve
the financial statements at their annual meeting on 15 May 20X2 and the approved financial statements are then
filed with a regulatory body on 17 May 20X2.
The financial statements are authorised for issue on 18 March 20X2 (date of board authorisation for issue).

6 In some cases, the management of an entity is required to issue its financial statements to a supervisory board
(made up solely of non-executives) for approval. In such cases, the financial statements are authorised for issue
when the management authorises them for issue to the supervisory board.

© IASCF 5
IAS 10

Example
On 18 March 20X2, the management of an entity authorises financial statements for issue to its supervisory
board. The supervisory board is made up solely of non-executives and may include representatives of
employees and other outside interests. The supervisory board approves the financial statements on 26 March
20X2. The financial statements are made available to shareholders and others on 1 April 20X2. The
shareholders approve the financial statements at their annual meeting on 15 May 20X2 and the financial
statements are then filed with a regulatory body on 17 May 20X2.
The financial statements are authorised for issue on 18 March 20X2 (date of management authorisation for
issue to the supervisory board).

7 Events after the balance sheet date include all events up to the date when the financial statements are authorised
for issue, even if those events occur after the public announcement of profit or of other selected financial
information.

Recognition and measurement

Adjusting events after the balance sheet date

8 An entity shall adjust the amounts recognised in its financial statements to reflect adjusting events after
the balance sheet date.
9 The following are examples of adjusting events after the balance sheet date that require an entity to adjust the
amounts recognised in its financial statements, or to recognise items that were not previously recognised:
(a) the settlement after the balance sheet date of a court case that confirms that the entity had a present
obligation at the balance sheet date. The entity adjusts any previously recognised provision related to
this court case in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets or
recognises a new provision. The entity does not merely disclose a contingent liability because the
settlement provides additional evidence that would be considered in accordance with paragraph 16 of
IAS 37.
(b) the receipt of information after the balance sheet date indicating that an asset was impaired at the
balance sheet date, or that the amount of a previously recognised impairment loss for that asset needs to
be adjusted. For example:
(i) the bankruptcy of a customer that occurs after the balance sheet date usually confirms that a
loss existed at the balance sheet date on a trade receivable and that the entity needs to adjust
the carrying amount of the trade receivable; and
(ii) the sale of inventories after the balance sheet date may give evidence about their net realisable
value at the balance sheet date.
(c) the determination after the balance sheet date of the cost of assets purchased, or the proceeds from
assets sold, before the balance sheet date.
(d) the determination after the balance sheet date of the amount of profit-sharing or bonus payments, if the
entity had a present legal or constructive obligation at the balance sheet date to make such payments as
a result of events before that date (see IAS 19 Employee Benefits).
(e) the discovery of fraud or errors that show that the financial statements are incorrect.

Non-adjusting events after the balance sheet date

10 An entity shall not adjust the amounts recognised in its financial statements to reflect non -adjusting events
after the balance sheet date.
11 An example of a non-adjusting event after the balance sheet date is a decline in market value of investments
between the balance sheet date and the date when the financial statements are authorised for issue. The decline in
market value does not normally relate to the condition of the investments at the balance sheet date, but reflects
circumstances that have arisen subsequently. Therefore, an entity does not adjust the amounts recognised in its
financial statements for the investments. Similarly, the entity does not update the amounts disclosed for the
investments as at the balance sheet date, although it may need to give additional disclosure under paragraph 21.

6 © IASCF
 IAS 10

Dividends
12 If an entity declares dividends to holders of equity instruments (as defined in IAS 32 Financial
Instruments: Presentation) after the balance sheet date, the entity shall not recognise those dividends as a
liability at the balance sheet date.
13 If dividends are declared (ie the dividends are appropriately authorised and no longer at the discretion of the
entity) after the balance sheet date but before the financial statements are authorised for issue, the dividends are
not recognised as a liability at the balance sheet date because they do not meet the criteria of a present obligation
in IAS 37. Such dividends are disclosed in the notes in accordance with IAS 1 Presentation of Financial
Statements.

Going concern
14 An entity shall not prepare its financial statements on a going concern basis if management determines
after the balance sheet date either that it intends to liquidate the entity or to cease trading, or that it has
no realistic alternative but to do so.
15 Deterioration in operating results and financial position after the balance sheet date may indicate a need to
consider whether the going concern assumption is still appropriate. If the going concern assumption is no longer
appropriate, the effect is so pervasive that this Standard requires a fundamental change in the basis of accounting,
rather than an adjustment to the amounts recognised within the original basis of accounting.
16 IAS 1 specifies required disclosures if:
(a) the financial statements are not prepared on a going concern basis; or
(b) management is aware of material uncertainties related to events or conditions that may cast significant
doubt upon the entity’s ability to continue as a going concern. The events or conditions requiring
disclosure may arise after the balance sheet date.

Disclosure

Date of authorisation for issue

17 An entity shall disclose the date when the financial statements were authorised for issue and who gave that
authorisation. If the entity’s owners or others have the power to amend the financial statements after
issue, the entity shall disclose that fact.
18 It is important for users to know when the financial statements were authorised for issue, because the financial
statements do not reflect events after this date.

Updating disclosure about conditions at the balance sheet date

19 If an entity receives information after the balance sheet date about conditions that existed at the balance
sheet date, it shall update disclosures that relate to those conditions, in the light of the new information.
20 In some cases, an entity needs to update the disclosures in its financial statements to reflect information received
after the balance sheet date, even when the information does not affect the amounts that it recognises in its
financial statements. One example of the need to update disclosures is when evidence becomes available after the
balance sheet date about a contingent liability that existed at the balance sheet date. In addition to considering
whether it should recognise or change a provision under IAS 37, an entity updates its disclosures about the
contingent liability in the light of that evidence.

Non-adjusting events after the balance sheet date

21 If non-adjusting events after the balance sheet date are material, non-disclosure could influence the
economic decisions of users taken on the basis of the financial statements. Accordingly, an entity shall
disclose the following for each material category of non-adjusting event after the balance sheet date:
(a) the nature of the event; and
(b) an estimate of its financial effect, or a statement that such an estimate cannot be made.

© IASCF 7
IAS 10

22 The following are examples of non-adjusting events after the balance sheet date that would generally result in
disclosure:
(a) a major business combination after the balance sheet date (IFRS 3 Business Combinations requires
specific disclosures in such cases) or disposing of a major subsidiary;
(b) announcing a plan to discontinue an operation;
(c) major purchases of assets, classification of assets as held for sale in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations, other disposals of assets, or
expropriation of major assets by government;
(d) the destruction of a major production plant by a fire after the balance sheet date;
(e) announcing, or commencing the implementation of, a major restructuring (see IAS 37);
(f) major ordinary share transactions and potential ordinary share transactions after the balance sheet date
(IAS 33 Earnings per Share requires an entity to disclose a description of such transactions, other than
when such transactions involve capitalisation or bonus issues, share splits or reverse share splits all of
which are required to be adjusted under IAS 33);
(g) abnormally large changes after the balance sheet date in asset prices or foreign exchange rates;
(h) changes in tax rates or tax laws enacted or announced after the balance sheet date that have a significant
effect on current and deferred tax assets and liabilities (see IAS 12 Income Taxes);
(i) entering into significant commitments or contingent liabilities, for example, by issuing significant
guarantees; and
(j) commencing major litigation arising solely out of events that occurred after the balance sheet date.

Effective date
23 An entity shall apply this Standard for annual periods beginning on or after 1 January 2005. Earlier
application is encouraged. If an entity applies this Standard for a period beginning before 1 January 2005,
it shall disclose that fact.

Withdrawal of IAS 10 (revised 1999)

24 This Standard supersedes IAS 10 Events After the Balance Sheet Date (revised in 1999).

8 © IASCF
 IAS 10

Appendix
Amendments to other pronouncements
The amendments in this appendix shall be applied for annual periods beginning on or after 1  January 2005. If an entity
applies this Standard for an earlier period, these amendments shall be applied for that earlier period.

*****

The amendments contained in this appendix when this Standard was revised in 2003 have been incorporated into the
relevant pronouncements published in this volume.

© IASCF 9
IAS 10

Approval of IAS 10 by the Board

International Accounting Standard 10 Events after the Balance Sheet Date was approved for issue by the fourteen
members of the International Accounting Standards Board.

Sir David Tweedie Chairman

Thomas E Jones Vice-Chairman

Mary E Barth

Hans-Georg Bruns

Anthony T Cope

Robert P Garnett

Gilbert Gélard

James J Leisenring

Warren J McGregor

Patricia L O’Malley

Harry K Schmid

John T Smith

Geoffrey Whittington

Tatsumi Yamada

10 © IASCF
 IAS 10 BC

Basis for Conclusions on

IAS 10 Events after the Balance Sheet Date
This Basis for Conclusions accompanies, but is not part of, IAS 10.

Introduction
BC1 This Basis for Conclusions summarises the International Accounting Standards Board’s considerations in
reaching its conclusions on revising IAS 10 Events After the Balance Sheet Date in 2003. Individual Board
members gave greater weight to some factors than to others.
BC2 In July 2001 the Board announced that, as part of its initial agenda of technical projects, it would undertake a
project to improve a number of Standards, including IAS 10. The project was undertaken in the light of queries
and criticisms raised in relation to the Standards by securities regulators, professional accountants and other
interested parties. The objectives of the Improvements project were to reduce or eliminate alternatives,
redundancies and conflicts within Standards, to deal with some convergence issues and to make other
improvements. In May 2002 the Board published its proposals in an Exposure Draft of Improvements to
International Accounting Standards, with a comment deadline of 16 September 2002. The Board received over
160 comment letters on the Exposure Draft.
BC3 Because the Board’s intention was not to reconsider the fundamental approach to the accounting for events after
the balance sheet date established by IAS 10, this Basis for Conclusions does not discuss requirements in IAS 10
that the Board has not reconsidered.

Limited clarification
BC4 For this limited clarification of IAS 10 the main change made is in paragraphs 12 and 13 (paragraphs 11 and 12
of the previous version of IAS 10). As revised, those paragraphs state that if dividends are declared after the
balance sheet date, an entity shall not recognise those dividends as a liability at the balance sheet date. This is
because undeclared dividends do not meet the criteria of a present obligation in IAS 37 Provisions, Contingent
Liabilities and Contingent Assets. The Board discussed whether or not an entity’s past practice of paying
dividends could be considered a constructive obligation. The Board concluded that such practices do not give
rise to a liability to pay dividends.

© IASCF 11
12 © IASCF