Section 26: Events Occurring after the Reporting Period (AASB 1061_04-26)

This section applies to the accounting for, and disclosure of, events occurring after the reporting period. Events occurring after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue.

An entity shall adjust the amounts recorded in its financial statements and update the related disclosures to reflect events that occur after the reporting period and provide evidence of conditions that existed at the end of the reporting period. The following are examples of events that require an entity to adjust the amounts recorded in its financial statements or to record items not previously recorded: 

(a) the settlement after the end of the reporting period of a court case confirming that the entity had a liability at the end of the reporting period because the disputed event occurred on or before that date. The entity adjusts any previously recorded provision related to this court case in accordance with Section 19 or records a new provision; 

(b) the receipt of information after the end of the reporting period indicating that an asset was impaired or further impaired at that date. For example: 

(i) the bankruptcy of a debtor occurring after the end of the reporting period usually confirms that the debtor was credit-impaired at the end of the period; and 

(ii) the disposal of physically damaged inventories or perishable items after the end of the reporting period might provide evidence about their estimated selling price less costs to complete and sell at that date; and 

(c) the discovery of fraud or errors that show that the financial statements are incorrect.

An entity shall not adjust the amounts recorded in its financial statements to reflect events after the end of the reporting period indicating conditions that arose after that date. Instead, the entity shall make the disclosures required by paragraph 26.4. The following are examples of such events: 

(a) the entity’s management decides, after the end of the reporting period, to make major further grants to the community; 

(b) major purchases and disposals of assets occurring after the end of the reporting period; and 

(c) a decision made by a lender after the end of the reporting period to forgive a major loan to the entity.

Where material events occur after the end of the reporting period and indicate conditions that arose after that date, the entity shall disclose the following information in the notes for each material category of such events: 

(a) the nature of the event; and 

(b) an estimate of its financial effect, or a statement that such an estimate cannot be made. 

The disclosures shall reflect information that becomes known after the end of the reporting period but before the financial statements are authorised for issue.

An entity is not required to disclose comparative information about events occurring after the end of the previous reporting period.