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Commission Regulation
(EC) No 2238/2004 of 29 December 2004 amending
Regulation (EC) No 1725/2003 adopting certain
international accounting standards in accordance with
Regulation (EC) No 1606/2002 of the European Parliament
and of the Council, as regards IASs IFRS 1, IASs Nos 1
to 10, 12 to 17, 19 to 24, 27 to 38, 40 and 41 and SIC
Nos 1 to 7, 11 to 14, 18 to 27 and 30 to 33
Content |
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Objective
1. The objective of
this Standard is to prescribe:
(a) when an entity
should adjust its financial statements for events after the
balance sheet date; and
(b) the disclosures
that an entity 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 entity 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
2. This Standard
shall be applied in the accounting for, and disclosure
of, events after the balance sheet date.
Definitions
3. The following
terms are used in this Standard with the meanings specified:
Events after the
balance sheet date are those events, 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:
(a) those that
provide evidence of conditions that existed at the
balance
sheet date (adjusting events after the balance sheet
date);
and
(b) those that are
indicative of conditions that arose after the balance
sheet date (non-adjusting events after the balance
sheet
date).
4. 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.
5. In some cases, an
entity is required to submit its financial statements to its
shareholders for approval after the financial statements have
been issued. In such cases, the financial statements are
authorised for issue on the date of issue, not the date when
shareholders approve the financial statements.
Example
The management of an
entity completes draft financial statements for the year to 31
December 20X1 on 28 February 20X2. On 18 March 20X2, the board
of directors reviews the financial statements and authorises
them for issue. The entity announces its profit and selected
other financial information on 19 March 20X2. The financial
statements are made available to shareholders and others on 1
April 20X2. The shareholders approve the financial statements
at their annual meeting 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 March 20X2 (date of board authorisation for
issue).
6. In some cases,
the management of an entity is required to issue its financial
statements to a supervisory board (made up solely of
non-executives) for approval. In such cases, the financial
statements are authorised for issue when the management
authorises them for issue to the supervisory board.
Example
On 18 March 20X2,
the management of an entity authorises financial statements
for issue to its supervisory board. The supervisory board is
made up solely of non-executives and may include
representatives of employees and other outside interests. The
supervisory board approves the financial statements on 26
March 20X2. The financial statements are made available to
shareholders and others on 1 April 20X2. The shareholders
approve the financial statements at their annual meeting on 15
May 20X2 and the financial statements are then filed with a
regulatory body on 17 May 20X2. The financial statements
are authorised for issue on 18 March 20X2 (date of
management authorisation for issue to the supervisory board).
7. 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 public announcement of profit or of
other selected financial information.
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