AS- 4 – Contingencies* and Events Occurring after the Balance Sheet Date :
*(Pursuant to AS 29, Provisions, Contingent Liabilities and Contingent Assets, becoming mandatory, all the relevant portions of this Standard that deal with contingencies stand withdrawn except to the extent they deal with impairment of assets not covered by other Indian Accounting Standards.)
Events that occur between the balance sheet date and the date on which the financial statements are prepared are referred to as events occurring after the balance sheet date. Such events are classified into two categories:
(i) events occurring after balance sheet date that provide further evidence to the conditions which were prevailing on the balance sheet date and (ii) events occurring after the balance sheet date that are indicative of the conditions which occur subsequent to the balance sheet date.
The standard requires adjustment of assets and liabilities in the case of events of the first type and only disclosure in the case of events of the second type. However, dividends declared after the balance sheet date have to be adjusted in the accounts. Proper disclosure of events and their financial effect must be made in the financial statements.