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Overview

IPSAS 14 is based on IAS 10 Events after the Balance Sheet Date (Revised 2003).


IPSAS 14 prescribes when events that occur after the reporting date require adjustments in the financial statements. Events providing evidence of conditions that existed at the end of the reporting period are “adjusting events”, whereas “non-adjusting events” indicate conditions that arose after the reporting date (to be disclosed if material).


IPSAS 14 was reissued in December 2006 and applies to annual periods beginning on or after 1 January 2008.



History of IPSAS 14










Effective date

Annual periods beginning on or after 1 January 2008.


Full text

Refer to IFAC website here


Summary of IPSAS 14 Events after the Reporting Period

Objective


IPSAS 14 prescribes when events that occur after the reporting date, but before the date the financial statements are authorized for issue, require adjustments in the financial statements. IPSAS 14 also prescribes the disclosures that should be made about the date the financial statements were authorized for issue and the required disclosures about events after the reporting date.



Scope

This standard applies to entities that prepare and present financial statements under the accrual basis of accounting [IPSAS 14.2]. IPSAS 14 applies to all public sector entities other than GBEs [IPSAS 14.3].


Key definitions

Reporting date: the last day of the reporting period to which the financial statements relate [IPSAS 14.6].

Event after the reporting date: an favorable or unfavorable event, that occurs between the reporting date and the date that the financial statements are authorised for issue [IPSAS 14.5].

Adjusting event: An event after the reporting date providing evidence of conditions that existed at the reporting date [IPSAS 14.5], including an event that indicates that the going concern assumption is not appropriate [IPSAS 14.1].

Non-adjusting event: An event after the reporting date that is indicative of a condition that arose after the reporting date [IPSAS 14.5].


Key principle of IPSAS 14

Adjusting events: Adjust financial statements for adjusting events after the reporting date [IPSAS 14.10]

Non-adjusting events: Do not adjust financial statements [IPSAS 14.12], disclosure might be required if material [IPSAS 14.30]

Dividends or similar distributions declared after the reporting date: the entity should not recognize those dividends or distributions as a liability at the reporting date [IPSAS 14.14].


Going concern issues arising after end of the reporting period


An entity shall not prepare its financial statements on a going concern basis if those responsible for the preparation of the financial statements or the governing body determine after the reporting date either [IAS 14.18]:

• that there is an intention to liquidate the entity or to cease operating, or

• that there is no realistic alternative but to do so.


IPSAS 14 states that judgement is required to determine if the carrying value of assets and liabilities have to be changed. This depends upon the particular circumstances of the entity [IPSAS 14.22].


Disclosures

The following disclosures are required:

• The date the financial statements were authorized for issue [IPSAS 14.26]

• The name of the individual or body who gave the authorization [IPSAS 14.26]

• If another body has the power to amend the financial statements after issuance, this fact shall be disclosed [IPSAS 14.26]

• An entity should update disclosures that relate to conditions that existed at reporting date to reflect any new information that it receives after the reporting date about those conditions [IPSAS 14.28]

• Non-adjusting events should be disclosed if they are material. The required disclosures are [IPSAS 14.30]:

a) the nature of the event

b) an estimate of its financial effect or a statement that an estimate of the effect cannot be made


If the entity is not considered as a going concern:

• the fact that the entity is not considered as a going concern [IPSAS 14.24(a)]

• the basis of preparation of the financial statements [IPSAS 14.24(a)]

• the reason why an entity is not considered as a going concern [IPSAS 14.24(a)]

• uncertainties, that may arise after the reporting date, that may cast significant doubt upon the entity’s ability to continue as a going concern [IPSAS 14.24(b)]



December 2001

Issuance of IPSAS 14: Events After the Reporting Date

December 2006

Revision of IPSAS 14

1 January 2008

Effective date of IPSAS 14

1 January 2011

Amendments by improvements to IPSASs (issued in January 2010)

IPSAS 14  Events after the Reporting Date