What characterizes non-adjusting events?

Non-adjusting events are those events that occur after the reporting period but before the financial statements are authorized for issue, which have significant implications for the financial statements. The key characteristic of these events is that they must be disclosed in the notes to the financial statements rather than being adjusted in the financial statements themselves. This means that while they may not affect the amounts reported in the financial statements for the reporting period, they are important for readers to be aware of.

These events can provide users of the financial statements with crucial information that could influence their decision-making. They do not merely confirm events or conditions that existed before the reporting period; instead, they introduce new facts that did not exist at that time. Thus, they need to be separately disclosed to ensure transparency and to provide a complete view of the entity's financial position and performance.

In contrast, adjusting events would typically confirm existing conditions and lead to changes in the figures reported in the financial statements. Non-adjusting events strictly arise after the end of the period in question, reinforcing the necessity of disclosing them so that stakeholders are well-informed of any significant developments that could impact their judgement on the financial statements being reviewed.