Adjusting events are events that occur after the balance sheet date but before the financial statements are approved, which provide additional evidence about conditions that existed at the balance sheet date.

Simple Meaning:

They are events that help correct or update financial statements because they relate to the past period.

Example:

If a customer who owed money at year-end becomes bankrupt shortly after the balance sheet date, the company must adjust the accounts to record bad debt.

Purpose:

To ensure financial statements show accurate information

To reflect the true financial position at year-end

In short, adjusting events require changes in the financial statements because they relate to conditions that already existed before the year ended.