An event that occurs after a reporting period but before the Corporate finance training program for that period have been issued or are available to be issued is called a subsequent event. Under FASB ASC 855, organizations have a responsibility to consider events that occur subsequent to year-end.

2. An event that occurs after a reporting period but before the Corporate finance training
program for that period have been issued or are available to be issued is called a
subsequent event. Under FASB ASC 855, organizations have a responsibility to consider
events that occur subsequent to year-end. That responsibility begins at the balance sheet
date and continues until financial statements are issued (or available to be issued).
Depending on the situation, such events may or may not require disclosure in an
organization’s financial statements.

3. Recognized and non-recognized subsequent events, as defined in FASB ASC 855,
correspond to the two types of subsequent events. Those two types of subsequent events
are:
• Recognized events: Events that provide evidence of conditions that existed at the date
of the financial statements. (Also known as Type I event)
• Non-recognized Events: Events that provide evidence of conditions that arose after the
date of the financial statements. (Also known as Type II event)

4. According to the U.S gaap vs ifrs, the financial statements should include the effects of all
subsequent events that provide additional information about conditions in existence as of
the balance sheet date. It requires all entities to evaluate subsequent events through the
date when financial statements are available to be issued, whereas, a public company
should do so through the date when financial statements are actually filed with the SEC.

5. Examples of situations requiring the adjustment of financial statements are:
• Lawsuit. If the company faced a lawsuit before the balance sheet date and the lawsuit
is settled during the subsequent-events period, the contingent loss amount would be
adjusted by the company to match the actual settlement loss.
• Bad debt. Assuming that there is decline in market price of a company’s inventory due
to new technology, the adjustment to the financial statement would be required with
inventory valued at lower market value.

6. The subsequent events that are new events and provide new information about
conditions that did not exist as of the balance sheet date, these events are not recognized
in the financial statements, and no adjustments are required. However, a subsequent
event footnote disclosure should be made so that investors know the event occurred.
For example:
• A labor strike that could potentially threaten the company into bankruptcy should be
disclosed in the financial statements.
• Destruction of company assets
• Changes in the value of assets due to changes in exchange rates
• Sale of equity

7. Disclosure for non-recognized subsequent events is important in the footnotes only if
failure to disclose the details would cause the corporate finance online course to be
misleading to investors and lenders. The disclosures should include 1) a description of the
nature of the event, and 2) an estimate of the financial effect (or, if not practical, a
statement that an estimate can’t be made).
It is difficult to determine whether an event is recognized or non-recognized subsequent
event at times when circumstances are evolving. When events are evolving over a period
of time, a part of the impact may be recognized while other may be unrecognized.

8. For calendar year end 2019 financial statements, any COVID-19 related subsequent events
identified are likely to be non-recognized subsequent events (Type II event). For fiscal
years ending on March 31, 2020, more events may transform to recognized subsequent
event (type I) as a result of COVID-19.

9. Examples of items that COVID-19 might affect include:
• Investments — financial markets have had significant declines and volatility in 2020.
These types of subsequent declines in market values would normally be non-
recognized subsequent events (type II).
• Asset impairments — most asset impairments are type II events. There may be some
variation depending on the specific type and model applied.
• Lease modifications—lessees/lessors that modify the terms of the lease agreement
impact entities under both FASB ASC 840 and FASB ASC 842. Since that impact would
typically take place in the following year, lease modifications are normally type II
events.
• Going concern – COVID-19 may impact an entity’s assessment of its ability to continue
as a going concern. Again, however, this would be a type II event.

10. • Income taxes - According to FASB ASC 740-10-25-47, “the effect of a change in tax laws
or rates shall be recognized at the date of enactment.” The CARES Act included several
tax provisions to help entities, including the ability to carry back net operating losses.
As a result, this would be a type II event for calendar year 2019 online finance courses.
NOLs at the balance sheet date would continue to be presented as a deferred tax asset
until the date of enactment. Effective for financial statements dated March 31, 2020
and later, entities will book the tax refund as a reduction of income taxes.

11. Subsequent Events - U.S GAAP vs IFRS
US GAAP
Subsequent events are evaluated through the date the financial statements are issued or
available to be issued. Financial statements are considered issued when they are widely
distributed to shareholders or other users in a form that complies with US GAAP.
For SEC registrants, financial statements are issued when the financial statements are filed
with the SEC. Financial statements are considered available to be issued when they are in
a form that complies with US GAAP and all necessary approvals have been obtained. SEC
registrants and conduit-bond obligors evaluate subsequent events through the date the
financial statements are issued, while all other entities evaluate subsequent events
through the date that the financial statements were available to be issued.

12. IFRS
Subsequent events are evaluated through the date that the financial statements are
“authorized for issue.” Depending on an entity’s corporate governance structure and
statutory requirements, authorization may come from management or a board of
directors. Most US entities do not have a similar requirement.
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