Treatment of Events after Reporting Period - Some special Events - Ind AS - Indian Accounting Standards - Companies Law

Treatment of Events after Reporting Period - Some special Events Going Concern Events affecting Going Concern Assumption - An entity shall not prepare its financial statements on a going concern basis i.e., on liquidation basis or NRV basis, if management determines after the reporting period either that it intends to liquidate the entity or to cease trading, or that it has no realistic alternative but to do so It should consider as adjusting events. Deterioration in operating results and financial position after the reporting period may indicate a need to consider whether the going concern assumption is still appropriate. If the going concern assumption is no longer appropriate, the effect is so pervasive that this Standard requires a fundamental change in the basis of accounting , rather than an adjustment to the amounts recognised within the original basis of accounting. Ind AS 1 specifies required disclosures if: the financial statements are not prepared on a going concern basis; or management is aware of material uncertainties related to events or conditions that may cast significant doubt upon the entity s ability to continue as a going concern. The events or conditions requiring disclosure may arise after the reporting period. Dividend If an entity declares dividends to holders of equity instruments after the reporting period, the entity shall not recognise those dividends as a liability at the end of the reporting period. If dividends are declared after the reporting period but before the financial statements are approved for issue, the dividends are not recognised as a liability at the end of the reporting period because no obligation exists at that time. Such dividends are disclosed in the notes in accordance with Ind AS 1, Presentation of Financial Statements. Note Dividend on redeemable preference share is not dividend on equity instrument because redeemable preference share are financial liability. So, it is Interest which is recorded at the time of payment. Long-term Loan Arrangement If there is breach of material provision before balance sheet date with effect that liability becomes payable on demand but if lender agrees before approval of Financial Statements to not demand payment immediately Consider it as Adjusting Event. Disclosures An entity shall disclose the date when the financial statements were approved for issue and who gave that approval. If the entity s owner or others have the power to amend the financial statements after issue, the entity shall disclose that fact.