Subsequent Events (ASC 855)

Question 1

Subsequent Events

Answer 1

Events or Transactions that Have Material Effect on F/S

Occur After Date of F/S but before F/S are issued or available to be issued

Question 2

Examples of Subsequent Events

Answer 2

Lawsuits
Changes in Corporate Structure
Issuances of Debt and Equity Securities
Major Acquisitions
Significant Gains or Losses

Question 3

Contingent Liabilities

Answer 3

Can still be accrued even though the event happened subsequent of balance sheet date

Question 4

If accomplished during the subsequent events period A firm can reclassify current liability to long term if it accomplishes

Answer 4

Issue Stock to extinguish the debt

Refinance current Liability with non-current liability (irrevocable)

Question 5

Stock Dividends and Splits after balance sheet date

Answer 5

Are treated as if they occurred as of the balance sheet date

Question 6

IFRS does not

Answer 6

Require adjustments for Stock splits or reverses during subsequent period

Consider refinancing, amendments or waivers when determining classification of debt as current or non current

Question 7

IFRS Cut off date for subsequent events

Answer 7

Date financial statements are considered authorized for issuance