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Subsequent Events: What to Disclose? Read the case and answer the questions that follow Oftentimes a CPA's opinion on the fairness of the financial statements may be changed by subsequent events. Subsequent events are events that happen after the balance sheet date but before the financial statements are issued. Subsequent events are divided into two categories, those providing additional evidence about facts existing on or before the balance sheet date and those involving facts coming into existence after the balance sheet date. CONCEPT REVIEW: Accounting standards divide subsequent events into two categories, those that provide more information about facts that already existed at the balance sheet date and those that involve facts after the balance sheet date. 1. Type 1subsequent events involve events that existedthe balance sheet date. 2. Type 1 subsequent events requireof the financial statements. 3. Type 2 subsequent events come into existence_the balance sheet date. 4. Type 2 subsequent events occur after the balance sheet date but the completion of fieldwork. 5. Type 1 subsequent events come into existence due to new becoming availableStep by Step Solution
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