Subsequent Events

Topics: Balance sheet, Financial statements, Financial Accounting Standards Board Pages: 4 (1188 words) Published: November 18, 2013
Properly accounting for subsequent events is important because investors’ opinions could be dramatically altered by the events and transactions that occur after year end. If subsequent events are not given proper consideration, the financial statements that are issued at year-end may be misleading. Accounting Standards Codification (ASC) 855 provides guidance on the proper accounting for and disclosure of subsequent events. Due to the potential impact subsequent events may have on the financial statements, accountants must give consideration to events and transactions that occur after the balance sheet date up through the date of financial statement issuance. Similarly, auditors must review subsequent events and transactions up to the date of the report. Background Information

The current information about subsequent events under ASC 855 is based upon a Statement of Financial Accounting Standards that was originally released by the Financial Accounting Standards Board in May of 2009. The statement was FAS No. 165, Subsequent Events, and it pertained to financial periods ending after June 14, 2009. It was later codified into ASC 855. On February 24, 2010, the FASB finalized an Accounting Standards Update (ASU 2010-09) after concerns were raised from SEC filers about recognition and disclosure requirements. The current ASC 855 guidance contains the amendments presented in the Accounting Standards Update.

Subsequent Events
A subsequent event is an event or transaction that occurs after the balance sheet date but before the financial statements are issued or are available to be issued. It is important to note that there is a difference between when the financial statements are issued and when they are available to be issued. Financial statements are considered to be issued when they are widely distributed to shareholders and other users in a format that complies with GAAP. Financial statements are considered available to be issued when they are completed in a...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Events Essay
  • event management Research Paper
  • Unit 14 Event Driven Programming D1 Essay
  • event management Essay
  • Events Essay
  • Unit 14 Event-Driven Programming (P1, M1, D1) Essay
  • Essay on Management Requirements for Different Types of Events
  • Running a sustainable events business Essay

Become a StudyMode Member

Sign Up - It's Free