In accordance with the "Basic Standards for Enterprise Accounting," the Ministry of Finance issued Enterprise Accounting Standard No. 29 — Events After the Balance Sheet Date on 2006, Month 2, Day 15, effective as of 2007, Month 1, Day 1.
1. Overview of Guidelines
This standard specifies the recognition, measurement, and disclosure of events occurring after the balance sheet date. Events occurring after the balance sheet date are those that occur between the balance sheet date and the date when the financial statements are approved for issue, whether favorable or unfavorable.
Classification of events after the reporting period
- • Adjusting events: Events that provide new or additional evidence about conditions that existed at the balance sheet date.
- • Non-adjusting events: Events that occur after the balance sheet date.
II. Adjustments
Companies shall adjust for post-balance-sheet-date events as if they had occurred on the balance sheet date. Common adjusting events include:
Typical Adjustments
- • Settlement of litigation cases occurring after the balance sheet date
- • Objective evidence obtained after the balance sheet date indicates that an asset was impaired as of the balance sheet date.
- • Adjustments to the cost of assets purchased or revenue from assets sold before the balance sheet date, finalized after the balance sheet date
- • Fraud or errors in financial statements discovered after the balance sheet date
3. Non-Adjusting Events
Typical non-adjusting events
- • Major litigation, arbitration, or commitments occurring after the balance sheet date
- • Significant changes in asset prices, tax policies, or foreign exchange rates occur after the balance sheet date.
- • Significant asset losses due to natural disasters occurring after the balance sheet date
- • Issuance of stock and bonds, as well as other significant borrowing, after the balance sheet date
- • Capital reserve transferred to capital after the balance sheet date
- • Substantial losses incurred after the balance sheet date
4. Disclosure Requirements
Enterprises shall disclose the following information regarding events after the balance sheet date in the notes:
- • Approver of the financial report and the date on which the financial report was approved for issuance
- • Nature, content, and impact on financial position and operating results of each significant non-adjusting event after the reporting period
- • If an estimate cannot be made, explain the reason.
Regulatory Document Attachment
Enterprise Accounting Standards No. 29 — Events After the Balance Sheet Date (PDF)