AASB 110 - Events after the Reporting Period - August 2015

What this legislation does:

This is an accounting standard (AASB 110) that tells Australian companies and organisations how to handle important events that happen after their financial year ends but before their financial statements are finalised and published.

Think of it like this: your financial year ends on 30 June, but you don't publish your annual report until September. Stuff happens in those three months. This standard says which of those things you must go back and change your numbers for, and which ones you just mention in the notes.

Key rules:

• Adjusting events — If you find out something that proves conditions already existed at year-end (like a customer going bankrupt, proving they were already in trouble on 30 June), you must change your financial statements to reflect this.

• Non-adjusting events — If something new happens after year-end (like a factory burning down in July), you don't change the 30 June numbers, but if it's big enough, you must disclose it in the notes.

• Dividends — If the board declares dividends after year-end, you can't count them as owing at 30 June.

• Going concern — If after year-end the directors decide to wind up the company, you can't pretend it's a going concern (continuing to operate) in the 30 June accounts.