F2-M5-Subsequent Events

Question 1

What is a subsequent event and what are the two categories of subsequent events?

Answer 1

An event or transaction that occurs after the balance sheet date but before the financial statements are issued or are available to be issued.

1. Recognized subsequent events - provide additional information about conditions that existed at the balance sheet date.
2. Non-recognized subsequent events - provide information about conditions that occurred after the balance sheet date and did not exist on the balance sheet date.