What defines an adjusting event under IAS 10?

An adjusting event under IAS 10 is defined as an event that provides evidence of conditions that existed at the end of the reporting period. This follows the principle that financial statements should reflect the most accurate position of the entity's financial affairs as of the reporting date.

When an adjusting event occurs, it allows for new information to be recognized, which directly affects the reported figures in the financial statements. It ensures that users of financial statements have a complete and transparent view of the entity's financial situation, based on facts and events that were already in existence before the financial statements were finalized.

Understanding this concept is crucial, as it impacts how and when certain adjustments are made before the finalization of financial statements, ensuring compliance with accounting standards and providing relevant financial information to stakeholders.