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Standards for Reporting Events After the Reporting Date in Financial Statements

This standard outlines how entities should adjust their financial statements (FS) for events occurring after the reporting date. It specifies the required disclosures concerning the authorization date of the FS issue and events post-reporting date. Applicable to public sector entities using accrual accounting, the standard identifies two event types: adjusting events, which require FS adjustments, and non-adjusting events, which require disclosure of their nature and financial impact. This ensures transparency and accuracy in reporting financial outcomes.

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Standards for Reporting Events After the Reporting Date in Financial Statements

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  1. Events After the Reporting dateSLPSAS 06 P.Ariyasena Chief Accountant Ministry of Foreign Employment Promotion and Welfare

  2. Objective The objective of this standard is to (a)When an entity should adjust its FS for events after the reporting date, and (b)The disclosure that an entity should give about the date when the FS were authorized for issue and about events the reporting date

  3. Scope 1.An entity which prepares and presents FS under the accrual basis of accounting shall apply this standard and disclosure of events after the reporting date 2.This standard applies to all public sector entities other than GBE

  4. Definitions Events after the reporting date Are those events both favorable and unfavorable, that occur between the reporting date and the date when the FS are authorized for issue

  5. Examples Accounting Period -2013.01.01 -2013.12.31. Date of Financial Statements- 2013.12.31 Accounts Completed -2013.03.31 FS Authorized for Issue-2013.04.30

  6. Two types of events can be identified (a) Adjusting Events Those events that provide evidence of conditions that existed at the reporting date Above events must be adjusted after reporting date (b) Non Adjusting Events Those events that are indicative of conditions that arose after reporting date

  7. Adjusting Events • Settlements of court case • Bankruptcy of customers • Sale of inventories after reporting period • Determination of cost of assets purchased/sold before end of reporting period • Discovery of fraud/error Non Adjusting Events • Decline in MV of investments • Dividends proposed • Major Business combination after reporting period • Announcing a plan to discontinue operation • Destruction of production plant by fire after reporting period

  8. Disclosures Non Adjusting Events 1.The nature of the event 2.An estimate of its financial impact or a statement that an estimate cannot be made

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