1. Subsequent Event
Events that occur after the close of the fiscal year, before financial statements are published.
Three types possible, require different treatment

2. Subsequent Events:
Event is a culmination of prior conditions and has material effect
Event is the result of new developments and has a major effect
Event is the result of new developments and does not have a major effect

3. Subsequent Event - Culmination of prior condition
Requires adjustment of balance sheet:
Example: Major customer declares bankruptcy:
Required action: Adjust accounts receivables, recognize loss on income statement

4. Subsequent Event: Result of new development
Event has a material effect:
e.g.: major plant facility is destroyed
Action required: Footnote disclosure
Event does not have material effect:
Ignore (will be recognized in new fiscal year)