ASBE No. 29
Active
Events after the Balance Sheet Date
Events after the Balance Sheet Date is part of the Chinese Accounting Standards for Business Enterprises (ASBE).
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Conceptual Framework Linkage
Distinguishing evidence of existing conditions from genuinely new developments
ASBE No. 29 governs EVENTS occurring AFTER the BALANCE sheet DATE but BEFORE the FINANCIAL statements are APPROVED for ISSUE – DETERMINING whether SUCH events should TRIGGER an ADJUSTMENT to the FINANCIAL statements THEMSELVES, or MERELY a DISCLOSURE – CLOSELY converged with IAS 10 internationally.
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Scope – the Period Between Balance Sheet Date and Approval
All companies preparing financial statements
This Standard applies to ALL companies, ADDRESSING events BETWEEN the BALANCE sheet DATE and the DATE financial STATEMENTS are APPROVED for ISSUE.
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Adjusting Events
Evidence of conditions that existed at the balance sheet date
An ADJUSTING event PROVIDES evidence of CONDITIONS that EXISTED at the BALANCE sheet DATE – the FINANCIAL statements are ADJUSTED to REFLECT this EVIDENCE.
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Non-Adjusting Events
Conditions arising after the balance sheet date
A NON-ADJUSTING event is INDICATIVE of CONDITIONS that AROSE AFTER the BALANCE sheet DATE – DISCLOSED only, WITH NO adjustment to RECOGNISED amounts.
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Going Concern Reassessment
A subsequent event can change the entire basis of preparation
WHERE a SUBSEQUENT event INDICATES that the GOING CONCERN basis of PREPARATION is NO LONGER appropriate (e.g. a DECISION to LIQUIDATE, arising AFTER the BALANCE sheet DATE), this REQUIRES a FUNDAMENTAL change to the BASIS on WHICH the ENTIRE financial STATEMENTS are PREPARED, RATHER than a NARROW, isolated ADJUSTMENT.
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The Approval Date – Marking the End of the Review Period
The precise reference point closing the subsequent events window
The SUBSEQUENT events REVIEW period RUNS from the BALANCE sheet DATE until the DATE the financial STATEMENTS are APPROVED for ISSUE (TYPICALLY board APPROVAL) – a PRECISE reference POINT determining the FINAL cut-OFF for SUBSEQUENT events ANALYSIS.
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Common Examples
Illustrative adjusting and non-adjusting events
Event typeExample
AdjustingA CUSTOMER'S bankruptcy CONFIRMING a receivable WAS already impaired at YEAR end
Non-adjustingA FIRE destroying a WAREHOUSE after YEAR end, UNRELATED to conditions EXISTING at year END
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Worked Example – an Adjusting Event
Reflecting evidence of a pre-existing condition
Example: Confirming an existing receivable's impairment
A company's fiscal year ends December 31. On January 20 (before board approval), a major customer with an outstanding receivable at December 31 files for bankruptcy, confirming the customer had already been in serious financial distress at the balance sheet date.
This is an ADJUSTING event – the company ADJUSTS its FINANCIAL statements, RECOGNISING an IMPAIRMENT of the RECEIVABLE as AT the BALANCE sheet DATE.
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Worked Example – a Non-Adjusting Event
Disclosure only, no adjustment to recognised amounts
Example: A fire destroying a facility after year end
The same company's warehouse is destroyed by a fire on January 25 – an event with no connection to conditions existing at December 31.
This is a NON-ADJUSTING event – the company DISCLOSES the NATURE of the EVENT and, WHERE practicable, an ESTIMATE of its FINANCIAL effect, WITHOUT adjusting the RECOGNISED amounts.
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Disclosure Requirements
What ASBE No. 29 requires
The date financial statements were approved for issueNature of material non-adjusting events, and an estimate of their financial effect (or a statement that such an estimate cannot be made)
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Critical Judgments & Estimates
Where judgement matters most
SIGNIFICANT JUDGEMENTS
Distinguishing adjusting from non-adjusting eventsWhether a subsequent event undermines the going concern basis of preparation
SIGNIFICANT ESTIMATES
Estimated financial effect of a material non-adjusting event, where practicable to determine
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Relationship to IAS 10
Comparison – ASBE 29 vs IAS 10
FeatureASBE 29IAS 10
Adjusting/non-adjusting distinctionYESYES – converged
Going concern reassessmentYESYES – converged
A GENUINELY thoroughly CONVERGED standard, MIRRORING IAS 10 CLOSELY.
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Statement Mapping
Where every subsequent event lands
EventStatement(s) affectedNotes
Adjusting eventBS ISRecognised amounts adjusted
Non-adjusting eventNotes onlyDisclosed, no adjustment
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Related Standards
Cross-reference map
StandardConnection
ASBE No. 30Presentation of Financial Statements – relevant for the going concern basis of preparation this Standard can affect
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Quick-Reference Glossary
Adjusting event
A subsequent event providing evidence of conditions existing at the balance sheet date, requiring adjustment to the financial statements.
Approval date
The date financial statements are approved for issue, marking the end of the subsequent events review period.
Financial statement key (Chinese GAAP / ASBE terminology)
BS Balance Sheet (资产负债表)
IS Income Statement (利润表)
SCOE Statement of Changes in Owners' Equity (所有者权益变动表)
CFS Cash Flow Statement (现金流量表)
History & Development
2006-02
ASBE No. 29 Events after the Balance Sheet Date issued
Operative for periods beginning on or after 1 February 2007