Subsequent Events

What if some events occurred after the reporting period which means the year-end date of the financial statements! But before the date on which the financial statements are expected to be issued.

what are we supposed to do? Are there some rules that we have to stick to it?

Luckily, my last semester gave me a chance to know the whole answer! These events are called subsequent events.

To understand the key to these events,

Let's dive into today's blog:

Imagine that you're an accountant, for a huge company.

The financial statements are already prepared for the year ending 31 December 2022.

But some events occurred after 31 December 2022 but prior to the issuance of the financial statements.

Well, we need to knowledge what's the timing of these events? are these events related to the reporting period ?

Therefore, require adjustment or disclosure in the statements. And sometimes neither of them!

-Examples of events that require adjustment to the financial statements are:

*Changes in inventory value due to obsolescence

*Compensation cases related to the financial statements year

*Any information related to accounts receivable such as receipts, bankruptcy

-Examples of events that require disclosure to the financial statements are:

*Issuance of new shares

*Dividends announcement

*Natural disasters such as floods, fires, and more.

-Written by: Raghad Alharbi