Reporting Requirements for Annual Financial Reports of State Agencies and Universities Show Notes & Samples Events that occur between the end of the period covered by the financial statements (08/31/CY) and the statement completion date (11/20/CY) that may materially affect the financial condition of the agency are considered subsequent events. If your agency has any subsequent events, provide sufficient detail in note disclosures. Examples of subsequent events include:
Evaluate events that occur prior to 11/20/CY that affect any estimates used in preparing the financial statements. Adjust the financial statements for any changes in estimates as a result of these events. For more information, refer to GASB 56, paragraphs 8–14. Submit a copy of the agency’s Note 16 from its published AFR through the ONDSS web application by selecting the Subsequent Events banner in the left navigation menu. The required format is a Microsoft Word document (latest version: docx) with header information that includes: agency name/number and note number/name. If Note 16 contains a table, include the table in the Word document — rather than as a separate Excel document or other database application file. If Note 16 does not apply, do not submit a note to indicate “not applicable.” Post-period Subsequent EventsEvents that occur between the end of the period covered by the financial statements (08/31/CY) and the end of February that may materially affect the financial condition of the agency (other than those previously disclosed in Note 16 – Subsequent Events and submitted by the statement completion date [11/20/CY]) are considered post-period subsequent events. Examples of post-period subsequent events include:
The Post-period Subsequent Events box on the ONDSS home screen is only available for agency submissions from Jan. 1 through Jan. 14 each year. See the Instructions for the ONDSS Web application section for reporting purposes. When should subsequent events, that occur after the balance sheet date but before the financial statements are issued, be recognized in the financial statements or, rather, merely be disclosed in the notes to the financial statements? In order to answer this question, it is important to first define what is a subsequent event? Per the Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 855-10-20, Subsequent Events are defined as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. There are two types of subsequent events. The first type of subsequent events are events or transactions that provide additional evidence about conditions that existed at the balance sheet date. The second type are events that provide evidence about conditions that did
not exist at the balance sheet date but arose subsequent to that date. When should subsequent events be recognized in the financial statements? Events that provide additional evidence about conditions that existed at the balance sheet date should be recognized in the financial statements. Some examples of recognized subsequent events are:
Events that provide evidence about conditions that did not exist at the balance sheet date, but arose after the balance sheet date but before the financial statements are issued should not be recognized. Some examples of unrecognized subsequent events are:
Disclosure Requirements In accordance with FASB ASC 855-10-50, if an entity is a non-SEC filer, the entity shall disclose the date through which subsequent events have been evaluated. That date is either the date the financial statements were issued or the date the financial statements were available to be issued. Additionally, certain unrecognized subsequent events must be disclosed if they are in such nature that omitting them would cause the financial statements to be misleading. For these events, the nature of the event and an estimate of its financial effect, or a statement that an estimate cannot be made, must be disclosed. Some unrecognized subsequent events may best be disclosed by supplementing the financial statements with pro forma information that reports the event as if it occurred at the financial statement date. What subsequent events should be disclosed?Subsequent Events: When Do I Record and When Do I Disclose?. Sale of a bond or capital stock issued after the balance sheet date;. A business combination that occurs after the balance sheet date;. Settlement of litigation when the event giving rise to the claim took place after the balance sheet date;. What should be disclosed in notes to the financial statements?Notes to the financial statements disclose the detailed assumptions made by accountants when preparing a company's: income statement, balance sheet, statement of changes of financial position or statement of retained earnings. The notes are essential to fully understanding these documents.
What is an example of a subsequent event that might be disclosed?Examples of events of the second type that require disclosure to the financial statements (but should not result in adjustment) are: Sale of a bond or capital stock issue. Purchase of a business. Settlement of litigation when the event giving rise to the claim took place subsequent to the balance-sheet date.
What are considered subsequent events?What are Subsequent Events? Subsequent events are events that occur after a company's year-end period but before the release of the financial statements. In other words, subsequent events are events that happen between the cut-off date and the date in which the company issues its financial statements.
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Which of the following are subsequent events that must be disclosed in the notes to the financial statements?
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