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When the management has decided to reorganize the business structure and for this reason provision had been created ..this decision was made in a board meeting which was held before the year end ..25 oct. Year end is 31oct. And directors have anounced this to the shareholders on 29 oct.
Substantive procedure includes inspecting dates on meeting minutes and formal communication to the shareholders to ensure both are dated before year end.
My ques is ..what if the board decided on 25 oct ..but announced to shareholders on 2 november….will the provision be included in the 31oct year end or not ?Yes. The provision for restructuring should be recognised only when a detailed plan is in place and the entity has started to implement the plan, or announced its main features to those affected. A Board decision is insufficient [IAS 37.72, Appendix C, Examples 5A & 5B].
The date of announcement to shareholders is irrelevant.
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