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IAS 10Case studies (Step 3 of 5)

Case study

Step 3 of 5

Version of this content

IAS 10 Events after the Reporting Period — wording before IFRS 18Applicable today

Applies to annual periods beginning before January 1, 2027.

Practical caseIAS 10L2 · Intermediate

Dividends declared after the reporting period, supervisory board and authorisation date

4 documents7 tasks≈ 55 min
0 / 9 items completed
Standards
IAS 10 — Events after the Reporting Period
Assistance levelHelp on demand · assistance on request
  • Method: on request
  • Checklist: on request
  • Hints: withdrawn
  • Step-by-step work: shown

Case brief

Situation

Sorvalis SA (fictitious entity) is finalising its 20X5 statements. A dividend was declared in March 20X6 and the draft note on events after the reporting period contains two errors.

Your assignment

Determine the authorisation date and who gave it, compute the dividend, assess its treatment, post the entry, measure its effect, correct the note and conclude.

Work on this file as you would in practice: read the situation, open the documents, sort the useful information, then carry out the work requested. The solution is revealed once you submit.

Intermediate level: help remains available, on demand.

Method

  1. Read the brief and the assignment.
  2. Open each document and spot the relevant data.
  3. Carry out the work in the suggested order.
  4. Submit, then read the conclusion and the model answer.

File checklist

  • Open each piece (0 / 4 consulted) · to do
  • Sort the information in the pieces · to do
  • Carry out the work (0 / 9) · to do
  • Submit the file, then assess yourself · to do

Events

Chronology of the file

  1. March 10 20X6Dividend declaration date · Dated fact of the file

    Document 1

  2. March 18 20X6Authorisation of issue to the supervisory board · Dated fact of the file

    Document 1

  3. April 2 20X6Approval by the supervisory board · Dated fact of the file

    Document 1

Documents

File documents

4 documents: open each one to read it.

Document 1Minutes

20X6 governance timetable

Sorvalis SA (fictitious entity) has a management board and a supervisory board made up solely of non-executive members. 3 March 20X6: the management board approves the 20X5 statements and proposes a dividend. 10 March 20X6: the supervisory board, competent under the articles (case data), declares the dividend, which can no longer be revoked. 18 March 20X6: the management board authorises issue of the statements to the supervisory board. 2 April 20X6: the supervisory board approves the statements. 15 May 20X6: shareholders' meeting, which has no power to amend the issued statements.

Data

Key data from the documents

The figures of the documents, gathered for your work.

ItemValueFound in
Dividend declaration dateMarch 10 20X6
Authorisation of issue to the supervisory boardMarch 18 20X6
Approval by the supervisory boardApril 2 20X6
Reference distributable profit€2,400,000.00
Payout ratio40%
Number of shares1,200,000 units

Sorting the information

Not every document matters: identify those that affect the accounting treatment.

Part 1 · Classification · Analysis

Sort each document: does it affect the accounting treatment?

Drag each item into its category, or tap the category under the item.

To sort4

  • 20X6 governance timetable

  • Distribution decision

  • Draft note on events after the reporting period

  • Commercial press release

Relevant to the treatment0

    No effect0

      Questions

      Work programme

      7 tasks in the order of the file. Calculations, entries and effects on the financial statements are marked; written answers are self-assessed against the solution.

      1. Task 1Analysis

        What is the date of authorisation for issue and who gave it?

      2. Task 2Calculation

        Compute the amount of the dividend declared.

        Calculator

        Click in an answer field to be able to insert the result.

        Part 1 · Calculation

        Compute the amount of the dividend declared.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      3. Task 3Professional judgement

        Is the dividend a liability at 31 December 20X5? When is it recognised?

      4. Task 4Journal entries

        Post the dividend entry at the appropriate date.

        Calculator

        Click in an answer field to be able to insert the result.

        Part 1 · Journal entry · Journal entries

        Entry 1 of 1

        One line = one account and one side. Add a line if the entry needs more; the balance check updates live.

        1. Line 1

        2. Line 2

        TotalsDebit0Credit0

      5. Task 5Effects on the financial statements

        What is the effect of this entry, and on which period?

        Part 1 · Classification · Analysis

        State the direction of the effect on each financial statement aggregate.

        1. Financial position (balance sheet)

        2. Profit or loss

        3. Other comprehensive income

        4. Equity

        Calculator

        Click in an answer field to be able to insert the result.

        Part 2 · Calculation · Analysis

        Quantify the effect on the aggregates concerned.

        1. €

        Checks

        • 0 / 1 step entered
        • Amounts readable

      6. Task 6Analysis

        Correct the draft note (D3).

      7. Task 7Conclusion

        Write the conclusion.

      Workspace

      Your working draft for this file: points noted, leads, intermediate calculations.

      Saved on this device only; never graded.

      Conclusion

      Submission and solution

      Complete every item of the file to submit it (0 / 9).

      Document this file

      These working papers use the data and results of this case.

      Normative references

      • IAS 10 §4
      • IAS 10 §5
      • IAS 10 §6
      • IAS 10 §12
      • IAS 10 §13
      • IAS 10 §17
      • IAS 10 §18