22.01 Subsequent Events

Question 1

What are subsequent events?

Answer 1

Subsequent events are events or transactions that have a material effect on the FS. Subsequent events occur after the date of the FS but before the statements are issued or are available to be issued.

Question 2

What are examples of subsequent events?

Answer 2

Lawsuits, changes in corporate structure, issuances of debt and equity securities, major acquisitions, and significant gains/losses.

Question 3

What are the two categories of subsequent events?

Answer 3

Type I and Type II.

Question 4

What is a Type I subsequent event?

Answer 4

The condition leading to the subsequent event existed at the balance sheet date.
Should be accrued for and disclosed (recognized).

Question 5

What is a Type II subsequent event?

Answer 5

The condition leading to the subsequent event did not exist at the balance sheet date but rather arose after the balance sheet date. Requires only footnote disclosure of events that have material effects on the FS.

Question 6

What is the period during which subsequent events are evaluated?

Answer 6

The period between the balance sheet date and either the date the FS are issued or the date the FS are available to be issued.