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Homework answers / question archive / All of the following are examples of subsequent events that would only be disclosed in the footnotes to the financial statements except O a bond issuance after the balance sheet date O fire or flood loss O the acquisition of another business the inability to collect a major customer's accounts receivable because the customer is bankrupt
All of the following are examples of subsequent events that would only be disclosed in the footnotes to the financial statements except O a bond issuance after the balance sheet date O fire or flood loss O the acquisition of another business the inability to collect a major customer's accounts receivable because the customer is bankrupt
A subsequent event is an event that occurs after a reporting period, but before the financial statements for that period have been issued or are available to be issued. Depending on the situation, such events may or may not require disclosure in an organization's financial statements. The two types of subsequent events are:
Additional information. An event provides additional information about conditions in existence as of the balance sheet date, including estimates used to prepare the financial statements for that period.- Events that provide additional evidence about conditions that existed at the balance sheet date should be recognized in the financial statements. Ex.-
New events. An event provides new information about conditions that did not exist as of the balance sheet date.- Events that provide evidence about conditions that did not exist at the balance sheet date, but arose after the balance sheet date but before the financial statements are issued should not be recognized.
Ex: bond issuance after the balance sheet date,
Natural disasters such as fire/ flood loss,
business acquisition
