What are adjusting events according to ISA 560?

Adjusting events, according to ISA 560, are those conditions that exist at the reporting date which provide additional evidence regarding the estimates or valuations in the financial statements. These events reflect circumstances that have occurred up to the date when the financial statements are issued, influencing the amounts in those statements.

For example, if a company becomes aware of an obligation as a result of litigation that occurred before the balance sheet date, this could require an adjustment to either recognize a liability or adjust a contingent liability. Such adjustments are crucial because they ensure that the financial statements provide a true and fair view of the entity's position at the reporting date.

Other answers suggest different aspects that do not accurately capture the definition and nature of adjusting events as specified in ISA 560. Some might mention future events or focus solely on disclosure, but adjusting events specifically concern those facts and circumstances that exist as of the financial statement date and necessitate changes to the financial statements to reflect new information accurately.