Updating disclosures about conditions at the reporting date

Learning objectives

• Determine when to update a disclosure about a condition that existed at the end of the reporting period (contingent liability) in the light of evidence received afterwards.L2, L3

Normative references

• IAS 10 §16IAS 1 specifies the disclosures required when the financial statements are not prepared on a going concern basis or when management is aware of material uncertainties that may cast significant doubt on the entity's ability to continue as a going concern; the events or conditions requiring those disclosures may arise after the reporting period.
• IAS 10 §19If an entity receives information after the reporting period about conditions that existed at the end of the reporting period, it updates the disclosures that relate to those conditions in the light of the new information.
• IAS 10 §20An entity may need to update the disclosures even when the information received after the reporting period does not affect the amounts recognised; example: evidence obtained after the reporting period about a contingent liability that existed at the end of the reporting period leads to updating the disclosures about that contingent liability.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

11 questions

• When an entity receives information after the reporting period about conditions that existed at the end of the period, it updates the disclosures about those conditions.L2
• Information received after the reporting period that changes no recognised amount never requires the notes to be updated.L2
• The events that give rise to disclosures about material uncertainties related to going concern may arise after the reporting period.L2
• After the reporting period, an entity obtains evidence about a contingent liability that existed at 31 December, without the conditions for a provision being met. What must it do?L2
• Which disclosures does an entity update in the light of information received after the reporting period?L2
• Which of these items of information received after the reporting period leads Zairvence to update an existing note?L3
• At 31 December, Zorgouël discloses a contingent liability for a customer claim. In February, the court-appointed expert puts the claim at three times the amount, the outflow remaining unlikely. The note is left unchanged. What is the error?L2
• At 31 December, Zélvix describes in a note a guarantee given for a partner, with the maximum exposure 'to be confirmed'. In January, the partner provides the final amount of the guaranteed debt. The note keeps the words 'to be confirmed'. What is the error?L3
• Since October, Zéstine has faced a claim from a competitor; at 31 December, an outflow is considered unlikely and a contingent liability is disclosed. In February, an expert report narrows the range at stake, the outflow remaining unlikely. Which treatment applies?L2
• In February, Zéstix receives two items of information: new evidence on a tax dispute opened in September, and a lawsuit brought by a customer over a February delivery. Which one leads to updating an existing note?L3
• At 31 December, Drilède discloses a material uncertainty about going concern, linked to a loan maturity. In February, its bank confirms five-year refinancing. What should be done with this note before authorisation?L3