#22 Flashcards
1
Q
Subsequent events: Type 1 vs Type 2
A
Subsequent events are conditions or transactions that occur between the balance sheet date and the date the financial statements (F/S) are issued or available to be issued. These events are type 1 or type 2.
Type 1: evidence that the condition existed at year end and must be recognized in the F/S.
Type 2: Not related to condition that existed as of the balance sheet date and does not require recognition in the F/S (but may require disclosure).
