FAQs on IND AS 10

1. What is the scope of IND AS 10?

Ans: IND AS 10 applies to all entities that prepare financial statements in accordance with Indian Accounting Standards (IND AS). It provides guidance on the recognition and disclosure of events after the reporting period.

2. What is the difference between adjusting and non-adjusting events?

Ans: Adjusting events are those that provide evidence of conditions that existed at the end of the reporting period and require adjustment to the financial statements. Non-adjusting events, on the other hand, are those that provide evidence of conditions that arose after the reporting period and do not require adjustment to the financial statements but need to be disclosed in the notes to the financial statements.

3. When should adjusting events be recognized in the financial statements?

Ans: Adjusting events should be recognized in the financial statements of the reporting period in which they occurred if they provide evidence of conditions that existed at the end of the reporting period.

4. What is the impact of non-adjusting events on financial statements?

Ans: Non-adjusting events do not require adjustment of the financial statements but need to be disclosed in the notes to the financial statements. The disclosure should include the nature of the event and an estimate of its financial impact, if determinable.

5. What are the disclosure requirements under IND AS 10?

Ans: IND AS 10 requires disclosure of the date when the financial statements were authorized for issuance, a description of the nature of the event and the financial impact, if determinable, for non-adjusting events, the nature of any material adjustments made to the financial statements due to adjusting events, and the fact that the financial statements do not include any adjustments for events that occurred after the reporting period.

6. How does IND AS 10 impact the preparation of financial statements?

Ans: IND AS 10 ensures that financial statements include all events up to the date of authorization for issuance. Entities need to comply with the requirements of IND AS 10 to ensure that their financial statements are accurate and reliable.

7. Can an entity make adjustments to the financial statements after they have been authorized for issuance?

Ans: No, an entity cannot make adjustments to the financial statements after they have been authorized for issuance. However, if a material error is discovered after the financial statements have been authorized for issuance, the entity should correct the error in the next set of financial statements.

8. Are there any exceptions to the disclosure requirements of IND AS 10?

Ans: IND AS 10 provides an exception to the disclosure requirements for events that occur between the end of the reporting period and the date when the financial statements are authorized for issuance if the entity's management determines that disclosure would be seriously prejudicial to the entity's interests. However, such events should still be recognized and adjusted in the financial statements if they provide evidence of conditions that existed at the end of the reporting period.

9. What is the objective of IND AS 10?

Ans: The objective of IND AS 10 is to ensure that events after the reporting period are recognized and disclosed appropriately in the financial statements of an entity to provide users with relevant and reliable information for decision-making.

10. Can an entity choose not to comply with IND AS 10?

Ans: No, an entity cannot choose not to comply with IND AS 10 if it prepares financial statements in accordance with IND AS. Compliance with IND AS 10 is mandatory for entities preparing financial statements in accordance with IND AS.

11. What are some examples of adjusting events?

Ans: Some examples of adjusting events include the discovery of fraud, a change in tax rates or laws, the resolution of litigation, and the receipt of information indicating that an asset was impaired at the end of the reporting period.

12. What are some examples of non-adjusting events?

Ans: Some examples of non-adjusting events include a major acquisition or divestiture, a natural disaster, a change in government regulations, and a significant decline in the market value of investments after the reporting period.

13. Can an entity recognize events after the reporting period if they occur after the date of authorization for issuance?

Ans: No, an entity cannot recognize events after the reporting period if they occur after the date of authorization for issuance. Any events that occur after the date of authorization for issuance are considered to be outside the scope of IND AS 10.

14. What is the difference between the date of the financial statements and the date of authorization for issuance?

Ans: The date of the financial statements is the date at which the financial statements are prepared, while the date of authorization for issuance is the date at which the financial statements are approved for publication and distribution to users. These two dates may be different, and IND AS 10 requires entities to disclose both dates in the notes to the financial statements.