Chapter 5

EVENTS AFTER THE REPORTING PERIOD

Definition
PAS 10, paragraph 3, defines events after the reporting period as those events
whether favorable or unfavorable na nag-occur sa pagitan ng end of reporting
period at ng date kung saan ang financial statements ay authorized for issue.
Ang events after the reporting period ay tinatawag din na subsequent events.
Ang events na nag-occur after the end of the reporting period ay nag-rerequire
ng either adjustments or disclosures.

Types of events after the reporting period

a. Adjusting events after the reporting period ay pangyayari na nagpo-provide ng

evidence of condition na nag-eexist sya at the end of the period. Ito ay nagre-
result ng adjustment sa financial statements dahil dahil nagpo-provide ito ng
additional information related doon sa condition na nag-eexist at the date of
financial statements.
b. Nonadjusting events after ng reporting period are those na nagpapakita na mag-
aarise ang event na ito after the end of reporting period. Hindi ito nagre-require
ng adjustiment sa financial statemets instead it requires disclosure if ito ay kino-
considered na material, otherwise i-ignore na lamang ito.

Therefore, it is appropriate na ma-iadjust ang financial statements for all events

na may clarity na mage-exist at the end of the reporting period and mage-exist
prior sa date the financial statements ay authorized for issue.

Ang entity dapat na i- adjust ang amount na ni-recognized sa financial

statements for adjusting events na may kasiguraduhan na mag-eexist sya at the
end of the reporting period.
 Hindi nire-recognize ng entity ang events after the reporting period na mag-
aarise lamang after the repoting period.

Example of adjusting events

1. Settlement after the reporting period of a court case. Ito ay settlement ng
contingencies dahil it confirms na ang entity ay mayroon ng present obligation at
the end of reporting period.
2. Bankruptcy of a customer na nag-occur after the reporting period. It says that
when the customer declared bankcruptcy ang entity will receive nothing they
have to record a loss dahil sa subsequent lack of recovery mula sa customer.
3. Sale of inventories after reporting period may give evidence about the net
realizable value at reporting date. Halimbawa kapag nagbenta ang entity ng
inventory at below cost meaning mas mababa ang net realizable value kaysa sa
cost, so overstated ang inventory. Ang resulting adjustment dito ay magre-reduce
ng inventory value at the balance sheet date.
4. Determination ng purchase /selling price ng isang asset after the reporting date,
nabili at nabenta during the current year.
5. Discovery ng fraud or errors that show the financial statements were incorrect ay
nagre-require ng adjustments sa financial statements.

Example of nonadjusting events

1. Any business acquisition after the end of the reporting period.
2. Sale or planong i-discontinue ang business after the reporting date
3. Any major purchese or sale of asset after the reporting date
4. Dividend declared after the reporting date
5. Any loss na lumabas after the reporting date dahil sa natural disasters kagaya ng
sunog or baha.
Financial statements authorized for issue
Ang financial statements ay authorized for issue kapag na-review na sya ng board of
directors at in-authorize na for issue.

In some cases, required na i-submit ang financial statements sa shareholders nito for
approval after na mai-issue.

In such cases, ang financial statement ay authorized for issue on the date na in-issue
ito ng board of directors at hindi sa date na inaprubahan ito ng shareholders.

Illustration
Nakompleto ng management ang draft ng financial statements for the year December
31, 2017 on February 1, 2017.

Ni-review ng board of directors ang financial statements at in-authorized ito for issue
noong March 1, 2017

In-annoce ng entity ang profit at selected financial information nito noong March 15,
2017. Available na ang financial statements for approval ng sharehoders noong April10,
2017.

After maaprubahan ang financialstatements, April15, 2017, ay maari na syang i-file sa

SEC.

The financial statements ay authorized for issue noong March 1, 2017, the date na in-
authorized na ng board of directors ang financial statements for issue.

Disclosure of date of authorization for issue

PAS 10, paragraph 17, provides na dapat i- disclose ng entity ang date kung kalian na-
authorized for issue ang financial statements at kung sino man ang nagbigay ng
authorization.

Kung ang owner or kung sinuman na may power na baguhin ang financial statements
after issue, ay dapat na i- disclose dito na binago nila ang financial statements.
Mahalaga sa users na malaman kung ang financial statements ba ay authorized
forissue dahil ang financial statements na na-issue ay hindi nagrereflect sa events after
the date of issue.

Development stage entity

Development stage entity is either:

a. Entity na ni-devote lahat ng kanilang efforts para makapag-establish ng new

business at kung saan ang kanila na-planong principal operations ay di pa naco-
commence.
b. Entity na ni-devote lahat ng kanilang efforts nila para makapag-establish ng new
business at kung saan ang kanila na-planong principal operations ay na-
commence or nakapagstart na pero hindi pa nakakapag-generate ng significant
revenue mula ssakanilang operations.

Development stage entity typically is devoting a substantial amount of effort to activities

like the following:

1. Financial planning
2. Raising capital
3. Exploring natural resources
4. Developing natural resources
5. Research ang development
6. Establishing sources ofsupply
7. Acquiring property, plant, and equipment, and other operating assets
8. Recruiting and training personnel
9. Starting up production
Financial reporting requirements
Ang development stage entity ay nag-iincur ng significant costs pero napakaliit lang ng
revenue or maaaring no revenue. Ibig sabihin, ang developmentstage entities ay
kadalasang nakakapag-incur ng operating losses during the development stage.

Ang development stage entity ay required na mag-account at mag-report sa

kaparehasna basis na ginagamit ng established operating entities.

Ang financial reporting ng development stage entity ay naiiba sa financial reporting para
sa estsblished operating entity with regards lamang sa footnote disclosures.

Parehas ng generally accepted principle ang ina-apply sa established entities at

development stage entities when it comes recognition of revenue at expenses at
capitalization ng costs.

The financial reporting requirements of development stage entities are summarized as

follows:

Financial statements

special disclosure requirements

Statement of financial position - cumulative net losses reported with a

descriptive title, such as deficit
accumulated during the development
stage in shareholders equity

Income statement - cumulative amount of revenue and

expenses from the entitys inception

Statement of cash flows - cumulative amount of cash receipts

and cash disbursements sincethe
entitys inception

Ang special disclosure requirements ay additional sa normal nan ire-require ng

accounting standards.