Subsequent events

Question 1

How should a significant event (Fire, lawsuit, issuing of stocks) that occurred before the year end financial statements be treated for subsequent events?

Answer 1

The event if is reasonable probable should be recorded and disclosed in the notes of the financial statement as a subsequent event.

Question 2

When are financial statements consider to be “available for issue”?

Answer 2

1. Comply with GAAP
2. Authorization has been received from Management.

Question 3

When are financial statements consider to be issued?

Answer 3

1. Comply with GAAP
2. Widely distributed

Question 4

For an SEC filer what is the evaluation period for subsequent events?

Answer 4

From the date of the closing period to the date the FS have been issued. No need to include in the subsequent event footnote the evaluation period.

Question 5

For a private company what is the evaluation period for subsequent events?

Answer 5

From the date of the closing period to the date the FS are “available to issue”. Include in the subsequent event footnote the available issue date.

Question 6

How should subsequent event that occur after the balance sheet date and did not exist at the balance sheet date be recognize on the financial statement?

Answer 6

No accrual is recorded but it’s disclosed in the financial statements