SFRS(I) 1-10 prescribes when an entity should adjust its financial statements for events that occur after the reporting period, and the disclosures it should give about such events. There is always a gap between the reporting date and the date the financial statements are authorised for issue, and things happen in that window. The standard's central distinction is between events that provide evidence of conditions that already existed at the reporting date (which are adjusted for) and events that reflect new conditions arising afterwards (which are disclosed but not adjusted). It is the Singapore equivalent of IAS 10 under IFRS and Ind AS 10 in India, and is in substance IAS 10 as applied in Singapore.
Objective and scope
The objective is to prescribe when an entity should adjust its financial statements for events after the reporting period, and the disclosures that an entity should give about the date when the financial statements were authorised for issue and about events after the reporting period. The standard also requires that an entity should not prepare its financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is not appropriate.
What are events after the reporting period
Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue. Two types are identified: adjusting events (those that provide evidence of conditions that existed at the end of the reporting period) and non-adjusting events (those that are indicative of conditions that arose after the reporting period). The date of authorisation for issue is significant, and an entity discloses that date and who gave that authorisation.
Adjusting events
An entity adjusts the amounts recognised in its financial statements to reflect adjusting events after the reporting period — events that provide evidence of conditions that existed at the reporting date. Examples include:
The settlement after the reporting period of a court case that confirms the entity had a present obligation at the end of the reporting period (adjusting the related provision).
The receipt of information after the reporting period indicating that an asset was impaired at the end of the reporting period (for example, the bankruptcy of a customer that confirms a trade receivable was impaired at the reporting date, or the sale of inventories after the reporting period giving evidence of their net realisable value at the reporting date).
The determination after the reporting period of the cost of assets purchased, or the proceeds from assets sold, before the end of the reporting period.
The discovery of fraud or errors that show the financial statements are incorrect.
The key point is that the condition already existed at the reporting date — the later event simply gives better evidence of it.
Non-adjusting events
An entity does not adjust the amounts recognised in its financial statements for non-adjusting events after the reporting period — events indicative of conditions that arose after the reporting date. A common example is a decline in the fair value of investments between the reporting date and the date of authorisation: the decline reflects circumstances that arose after the reporting period, so the investments are not written down for it. Other examples include a major business combination after the reporting period, the destruction of a major plant by a fire after the reporting date, announcing a plan to discontinue an operation, and abnormally large changes in asset prices or foreign exchange rates after the reporting period.
If non-adjusting events are material, an entity discloses the nature of the event and an estimate of its financial effect (or a statement that such an estimate cannot be made), because non-disclosure could influence the economic decisions that users make on the basis of the financial statements.
Dividends
If an entity declares dividends to holders of equity instruments after the reporting period, the entity does not recognise those dividends as a liability at the end of the reporting period. This is because no obligation exists at the reporting date — the dividend is declared afterwards. Such dividends are disclosed in the notes. This treatment is a specific and frequently relevant application of the adjusting/non-adjusting distinction.
Going concern
An entity does not prepare its financial statements on a going concern 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. 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 — and if it is not, the effect is so pervasive that the standard requires a fundamental change in the basis of accounting, rather than merely an adjustment.
A brief illustration
A Singapore company's financial statements for the year ended 31 December are authorised for issue on 15 March. In January, a customer that owed the company a large amount at 31 December goes bankrupt — this is an adjusting event, because it confirms that the receivable was impaired at the reporting date, so the company writes it down in the 31 December financial statements. In February, a fire destroys one of the company's warehouses — this is a non-adjusting event, because the condition (the fire) arose after the reporting date; the company does not adjust its 31 December figures but discloses the event and its estimated financial effect. Also in February, the directors declare a dividend — because it was declared after the reporting date, it is not recognised as a liability at 31 December, but is disclosed.
How SFRS(I) 1-10 relates to IFRS and Ind AS
SFRS(I) 1-10 is identical to IAS 10 under IFRS, and therefore very closely aligned with Ind AS 10 in India — the same distinction between adjusting and non-adjusting events, the same treatment of dividends declared after the reporting period, and the same going concern override. Because both Singapore and India converge to the IFRS text, the treatment is materially the same across the three frameworks.
Common pitfalls
Recurring issues include adjusting for a non-adjusting event (for example, writing down investments for a post-reporting-date market decline) or failing to adjust for an adjusting event (for example, not writing down a receivable when a customer's post-year-end bankruptcy confirms impairment at the reporting date); recognising a dividend declared after the reporting period as a liability at the reporting date; and failing to disclose material non-adjusting events or the date of authorisation for issue.
Why this is cleaner on a unified system
Assessing events after the reporting period — identifying which confirm conditions at the reporting date and which reflect new conditions — is more reliable when the underlying data and the accounts sit in one connected system, so that adjustments (such as writing down a receivable or a provision) can be made accurately and the related disclosures produced. When the accounts draw on a single source of truth, reflecting adjusting events and disclosing non-adjusting ones is more straightforward than reconciling figures held in separate tools during the period between the reporting date and authorisation for issue.
This article is a detailed educational summary of SFRS(I) 1-10 in plain language. It is not a substitute for the full text of the standard. Accounting standards are amended from time to time; always verify the current, authoritative text of SFRS(I) 1-10 as issued by the Singapore Accounting Standards Council before relying on it, and consult a qualified professional accountant for application to your specific circumstances.