Subsequent Events

Question 1

Define subsequent events:

Answer 1

Events that occur AFTER the balance sheet date but before the financial statements are issued

Question 2

When are you required to RECOGNIZE a subsequent event on the balance sheet date?

Answer 2

Events that occur after the balance sheet date but before the financial statements are issued. If the CONDITION existed at the balance sheet date, then it requires recognition in the financial statements.

If the CONDITION exist at the balance sheet date, then requires disclosure in the footnotes.

Question 3

Examples of subsequent events:

Answer 3

Issue new debt or securities

Business Combination

Lawsuit or ruling

Question 4

What are the differences between US GAAP and IFRS for subsequent events?

Answer 4

Cut-off Date: US GAAP when the financial statements are issued or available to be issued. IFRS is when the financial statements are authorized for issuance.

Share Splits: US GAAP adjusts for share splits, IFRS does not adjust for share splits

Refinancing/waivers: US GAAP considers waivers. IFRS does not considers or waivers for the classifications of debt.