New Disclosure Required for Subsequent Events


FASB on Thursday issued new rules that should alert financial statement users about the timing and events at issue in the statements.

 

FASB Statement no. 165, Subsequent Events, takes effect soon. It applies to interim and annual periods ending after June 15, 2009. The standard requires the disclosure of the date through which an entity has evaluated subsequent events and whether that represents the date the financial statements were issued or were available to be issued. Such disclosures should signal to financial statement users that events happening after the specified date have not been factored into the financial statements being presented, FASB said in a press release.

 

The standard is not expected to result in significant changes in the subsequent events that an entity reports—either through recognition or disclosure—in its financial statements, FASB says in the 36-page document. However, the standard introduces the notion, likely to be of particular interest to private companies, of financial statements being “available to be issued.”

 

An entity, including a public company, expected to widely distribute its financial statements to shareholders and other financial statement users is required to evaluate subsequent events through the date that the financial statements are issued, according to the standard. All other entities will evaluate subsequent events through the date that the financial statements are available to be issued. FASB says financial statements are considered available to be issued when they are complete in a form and format that complies with U.S. GAAP and have all the approvals (for example, from management, the board of directors or significant shareholders) necessary for issuance.

 

NEWS

IRS sets start date for tax season

The IRS announced that tax season will start in late January and that it will issue refunds to taxpayers despite the partial shutdown of the federal government.

PODCAST

Why CPAs can’t wait on automation tools

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.