IAS 10 — Reissue of financial statements

Date recorded:

At its November 2012 meeting, the Committee considered a request to clarify the accounting implications of applying IAS 10 Events After the Reporting Period when previously issued financial statements are reissued in connection with an offering document.

The request included a specific fact pattern where an entity is required to reissue its previously issued annual financial statements in connection with an offering document, where the most recently filed interim financial statements reflect matters requiring retrospective application. However, securities law and regulatory practice in this particular jurisdiction do not require the recognition, in its reissued financial statements, of events or transactions occurring between the time the financial statements were first issued and the time the financial statements were reissued. The national regulation requires the recognition in its reissued financial statements of only those adjustments that would ordinarily be made to the comparatives for the following year’s financial statements (e.g., adjustments for changes in accounting policy).

The specific question asked of the Committee was whether IAS 10 permits an entity to dual date its financial statements for the purpose of updating/incorporating subsequent events/comparative changes as of a date later than the date the financial statements were originally “authorised for issue”.

At the November meeting, many Committee members expressed concern that any decisions made by the Committee may conflict with national laws and regulations, and consequently, preferred that no amendments be made to IFRS; specifically noting that IAS 10 does not include in its scope guidance regarding reissuing financial statements.

The Committee requested the staff to draft a tentative agenda decision taking into account Committee discussions for consideration at a future meeting.

At this meeting, the Committee received the draft tentative agenda decision developed by the staff which reflected the previous tentative decisions of the Committee.

Many Committee members expressed concern with the tentative agenda decision wording in that it did not directly respond to the question asked of the Committee. Specifically, these Committee members highlighted that the tentative agenda decision, while reflecting the tentative conclusions of the Committee at its November 2012 meeting, did not directly respond to the question of whether dual dating is permitted in IFRS financial statements. Instead, it appeared to implicitly suggest that since dual dating is outside the scope of IFRSs, an entity may apply a policy decision as to whether dual dating is permitted. As a result, several Committee members suggested the discussion should centre on the relevant discussion in paragraphs 17 and 18 of IAS 10 – that being, the date of authorisation relates to the financial statements as whole, which incorporates the notes, and therefore, there can be only one date that applies. Introducing events on a piecemeal basis through dual dating contradicts the objective of IAS 10 which is to indicate to users ‘when the financial statements were authorised for issue because the financial statements do not reflect events after this date’.

However, a few other Committee members expressed concern with this conclusion stemming from the broad discussion of the topic at the November 2012 meeting. They were concerned that reaching a definitive conclusion on dual dating may conflict with national laws and regulations, although several countered that the Committee is not responsible for dictating the allowability of reissuance. Instead, the Committee can only require that any reissuance is performed in accordance with IFRSs.

After a lengthy debate, the Committee expressed support for specifying in the tentative agenda decision that any acts of omission or commission by an entity that are inconsistent with IAS 10 would disallow the entity to assert compliance with IFRS. While not specifically stated in the planned agenda decision, it would then be left to securities regulators to decide if they would require reissued financial statements not in compliance with IFRSs for a specific set of statements.

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