SUBSEQUENT EVENT AFTER THE REPORTING PERIOD

Abstract

Subsequent events are events that occur after the Statement of Financial Position date but before the financial statements for that period are published or available for publication. It is also an event that provides additional information about the conditions existing at the Statement of Financial Position date, including estimates used in the preparation of the financial statements for that period. Recognizing subsequent events in financial statements can be highly subjective. In view of the length of time required for a restatement of financial statements, it is worth considering carefully whether the circumstances of a subsequent event could be interpreted as not requiring a restatement of the financial statements. There is a risk of inconsistent application of subsequent event rules so that similar events do not always result in the same financial statement treatment. Therefore, the best approach is to adopt internal policies on which events will always result in a restatement of the financial statements; these policies are likely to need to be updated on an ongoing basis as the enterprise encounters new subsequent events that were not previously included in its policies.