#31 Subsequent Events

Question 1

If a subsequent event did not exist at the balance sheet date but occurred before the financial statements were issued, the company is required to do what?

Answer 1

Make a footnote describing the nature of the event and an estimate of the financial effect (or a statement that an estimate cannot be made).

Question 2

A contract should not be recognized until work has begun, no matter when the contract was signed.

True or False?

Answer 2

True

Question 3

If a contract was signed as of the balance sheet date, but no work has begun on it yet, it does not need to be disclosed in the footnotes.

True or False?

Answer 3

False