An event after the reporting period is anything, good or bad, that happens between the year end and the date the directors authorise the accounts for issue. If it gives evidence about conditions that already existed at the year end, the figures are adjusted; if it reflects conditions that arose afterwards, the figures stay as they are and material items are disclosed. Dividends declared after the year end are never a liability at the year end.

What period does Section 32 cover?

FRS 102 paragraph 32.2 defines events after the end of the reporting period as events, favourable and unfavourable, that occur between the end of the reporting period and the date the financial statements are authorised for issue. Paragraph 32.3 confirms the window runs right up to authorisation, even if profit figures have already been announced. For a company, section 414 of the Companies Act 2006 requires the annual accounts to be approved by the board and signed on behalf of the board by a director on the balance sheet, so the board approval date is the practical cut off.

Paragraph 32.9 requires the accounts to disclose the date they were authorised for issue and who gave that authorisation. Anything that happens after that date is outside Section 32 for those accounts.

How do you tell an adjusting event from a non adjusting one?

The question is always about the condition, not the event. Paragraph 32.2 says adjusting events provide evidence of conditions that existed at the end of the reporting period, while non adjusting events are indicative of conditions that arose after it. A customer going into administration in February is an event after the year end, but if the customer was already in financial difficulty at 31 December, the administration is evidence that the receivable was impaired at the year end. A warehouse fire in February tells you nothing about the warehouse at 31 December.

Paragraph 32.4 requires adjusting events to be reflected in the amounts recognised and the related disclosures. Paragraph 32.6 prohibits adjusting for non adjusting events.

What are the common adjusting events?

Paragraph 32.5 gives these examples:

  • settlement of a court case confirming that the entity had a present obligation at the year end, which means adjusting or recognising a provision rather than just disclosing a contingent liability (see provisions and contingencies);
  • information showing an asset was impaired at the year end, such as the bankruptcy of a customer or the sale of inventory below its carrying amount;
  • determining after the year end the cost of assets bought, or the proceeds of assets sold, before the year end;
  • determining the amount of profit sharing or bonus payments where there was a legal or constructive obligation at the year end; and
  • discovering fraud or errors showing the accounts are incorrect.

Bonuses carry a tax point. Section 1288 of the Corporation Tax Act 2009 says that if remuneration charged in the accounts is not paid within nine months after the end of the period of account, the deduction is given in the period in which it is paid instead, and no deduction is allowed if it is never paid. An accrued bonus confirmed after the year end is therefore correct in the accounts but may be disallowed in the tax computation for that year (see how bonuses are taxed).

Which non adjusting events have to be disclosed?

Paragraph 32.10 requires, for each category of material non adjusting event, the nature of the event and an estimate of its financial effect, or a statement that an estimate cannot be made. Paragraph 32.11 lists examples that would generally be disclosed, including a major business combination or disposal of a major subsidiary, plans to discontinue an operation, major asset purchases or disposals, destruction of a major plant by fire, a major restructuring, issues or repurchases of shares or debt, abnormally large changes in asset prices or exchange rates, significant changes in tax rates or laws, significant commitments or guarantees, and major litigation arising solely from post year end events.

Paragraph 32.7 adds two more: a fall in the market value of investments after the year end, which normally reflects later circumstances, and an amount receivable from a court judgement after the year end, which was a contingent asset at the reporting date.

Small companies are not exempt. Paragraph 1AC.39 of FRS 102, reflecting paragraph 64 of Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008, requires the nature and financial effect of material events after the balance sheet date that are not reflected in the profit and loss account or balance sheet to be stated (see FRS 102 Section 1A).

Are dividends declared after the year end a liability?

No. Paragraph 32.8 says that if an entity declares dividends to holders of its equity instruments after the end of the reporting period, it does not recognise them as a liability at the year end because no obligation exists at that time. The amount may be shown as a segregated component of retained earnings.

Company law explains when the obligation arises. ICAEW’s guidance on paying dividends says a dividend becomes a legally binding liability when a final dividend is declared by the members, even if it is stated to be payable later, or when an interim dividend is actually paid. HMRC’s Savings and Investment Manual at SAIM5040 takes the same line for tax: section 1168 of the Corporation Tax Act 2010 treats dividends as paid when they become due and payable, and an interim dividend can be varied or rescinded at any time before payment, so it is only due and payable when the payment date arrives.

Two practical points follow. A final dividend recommended by the directors before the accounts are approved but declared by the members afterwards is not a year end liability. And because the lawfulness of a dividend is tested against profits available under section 830 of the Companies Act 2006, directors must consider whether losses after the year end have eaten into those profits; ICAEW notes the test applies up to the point the dividend becomes binding. See paying dividends legally.

What if the business is no longer a going concern?

Paragraph 32.7A says an entity must not prepare its accounts on a going concern basis if management decides after the year end that it intends to liquidate the entity or cease trading, or has no realistic alternative. Paragraph 32.7B explains that a deterioration in results after the year end may require the going concern assumption to be revisited, and that if it no longer holds, the effect is pervasive and changes the whole basis of accounting rather than individual amounts. See going concern assessment.

How does it work in a real set of accounts?

Illustration only. A company has a 31 December 2026 year end and the board approves the accounts on 20 May 2027.

Event in 2027 Treatment
February: a customer owing £30,000 at the year end enters administration after months of late payment Adjusting: impair the receivable at 31 December
March: a fire destroys the main warehouse Non adjusting: disclose nature and estimated effect
April: stock held at the year end is sold below cost Adjusting: write down to net realisable value
April: directors recommend a final dividend of £40,000, to be declared at the June general meeting Not a liability: may be shown as a segregated component of retained earnings
June: the members declare the dividend After authorisation: outside Section 32 for these accounts

What about tax rate changes announced after the year end?

Deferred tax is measured at rates enacted or substantively enacted at the reporting date. ICAEW’s deferred tax helpsheet gives an example in which a planned rate increase is cancelled after the year end but before the accounts are signed: the figures do not change, and the announcement is a non adjusting event disclosed under paragraph 32.10 if material. Paragraph 32.11(h) lists changes in tax rates or laws with a significant effect on current and deferred tax as a typical disclosure. See deferred tax on revaluations.

What mistakes come up most often?

  • Treating every post year end loss as non adjusting without asking whether the condition existed at the year end.
  • Accruing a dividend declared or recommended after the year end.
  • Updating the year end market value of investments for a later fall in prices.
  • Leaving the authorisation date and approver out of the accounts, as paragraph 32.9 requires.
  • Stopping the review at the year end rather than continuing it up to the date the board approves the accounts.
  • Correcting an error discovered after the year end as a current year item when it relates to the year being reported, which 32.5(e) treats as adjusting; older errors are dealt with as prior period adjustments.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.