4.3 Events after the Reporting Period

Events after the reporting period, also known as post-balance sheet events or subsequent events, are events that occur between the end of the reporting period and the date when the financial statements are authorized for issuance. These events have the potential to affect the company’s financial position, performance, or disclosures and may require adjustments or disclosures in the financial statements. International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) provide guidance on how to handle events after the reporting period. There are two types of events after the reporting period:

1. Adjusting Events: Adjusting events are events that provide evidence of conditions that existed at the end of the reporting period. They require adjustments to the financial statements to reflect the impact of these events. Adjusting events include:
   • Settlement of a lawsuit or resolution of a dispute that confirms a liability’s existence at the reporting date.
   • Discovery of new information that provides evidence of conditions that existed at the reporting date.
   • The sale of assets or incurrence of liabilities that affect the company’s financial position as of the reporting date.

   If an adjusting event occurs after the reporting period, the financial statements should be adjusted to reflect the impact of that event. The adjustments are made in the financial statements for the reporting period, and the notes should disclose the nature of the event and its effect on the financial statements.

2. Non-Adjusting Events: Non-adjusting events are events that are indicative of conditions that arose after the reporting period. These events do not require adjustments to the financial statements but may require disclosure in the notes to provide additional information to users of the financial statements. Non-adjusting events include:
   • Significant business acquisitions or disposals after the reporting date.
   • Major natural disasters or political events that occurred after the reporting date.
   • Issuance of shares or dividends after the reporting date.

   For non-adjusting events, financial statements are not restated, but companies should disclose the nature of the event, an estimate of its financial effect (if possible), and information about any significant uncertainties arising from the event.