LEMBAGA PIAWAIAN PERAKAUNAN MALAYSIA
MALAYSIAN ACCOUNTING STANDARDS BOARD

Events After the Balance Sheet Date

The standards, which have been set in bold type, should be read in the context of the background material and implementation guidance in this Standard, and in the context of the Foreword to Financial Reporting Standards. Financial Reporting Standards are not intended to apply to immaterial item

Objective

The objective of this Standard is to prescribe:

1. when an enterprise should adjust its financial statements for events after the balance sheet date; and

2. the disclosures that an enterprise should give about the date when the financial statements were authorised for issue and about events after the balance sheet date.

The Standard also requires that an enterprise should not prepare its financial statements on a going concern basis if events after the balance sheet date indicate that the going concern assumption is not appropriate.

Scope

1. This Standard should be applied in the accounting for, and disclosure of, events after the balance sheet date.

2. This Standard supersedes the parts of MASB Approved Accounting Standard IAS 10, Contingencies and Events Occurring After the Balance Sheet Date, that deal with events after the balance sheet date. The parts of that Standard which deal with contingencies are superseded by FRS 137₂₀₀₄, Provisions, Contingent Liabilities and Contingent Assets.

Definitions

1. The following terms are used in this Standard with the meanings specified:

   
   An equity instrument is any contract that evidences a residual interest in the assets of an enterprise after deducting all of its liabilities.

   
   Events after the balance sheet date are those events, both favourable and unfavourable, that occur between the balance sheet date and the date when the financial statements are authorised for issue. Two types of events can be identified:

   1. those that provide further evidence of conditions that existed at the balance sheet date (adjusting events after the balance sheet date); and

   2. those that are indicative of conditions that arose after the balance sheet date (non-adjusting events after the balance sheet date).

2. The process involved in authorising the financial statements for issue will vary depending upon the management structure, statutory requirements and procedures followed in preparing and finalising the financial statements.

3. In some cases, an enterprise is required to submit its financial statements to its shareholders for approval after the financial statements have already been issued. In such cases, the financial statements are authorised for issue on the date of original issuance, not on the date when shareholders approve the financial statements.

   Example The management of an enterprise completes draft financial statements for the year to 31 December 20X1 on 28 January 20X2. On 18 February 20X2, the board of directors reviews the financial statements and authorises them for issue. The enterprise announces its profit and other selected financial information on 19 February 20X2. The financial statements are made available to shareholders and others on 1 April 20X2. The annual meeting of shareholders approves the financial statements on 15 May 20X2 and the approved financial statements are then filed with a regulatory body on 17 May 20X2. The financial statements are authorised for issue on 18 February 20X2 (date of Board authorisation for issue).

4. Events after the balance sheet date include all events up to the date when the financial statements are authorised for issue, even if those events occur after the publication of a profit announcement or of other selected financial information.

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