B2.507 Reopening of tax returns to reallocate receipts and expenses

B2.507 Reopening of tax returns to reallocate receipts and expenses

GAAP requires events arising after the end of the reporting period to be taken into account when they provide evidence of conditions that existed at the reporting date¹. All events which occur between the reporting date and the date on which the financial accounts are authorised for issue are included, even if they occur after the public announcement of profit or loss or other financial information.

However, not all events should be taken into account in arriving at the figures in the financial statements. GAAP usually divides events occurring after the end of the reporting period into two categories: 'adjusting events' and 'non-adjusting events'². Adjusting events are those that provide additional evidence relating to conditions that existed at the end of the reporting period and require changes to be included in the accounts. Non-adjusting events are indicative of conditions that arose after the end of the accounting period. They do not result in changes in the accounts, but may be significant enough to warrant disclosure.

In certain circumstances, a computation which has been accepted as the basis of an assessment for a period of account may be reopened