What is Subsequent Events?
Subsequent events are events that occur between the balance sheet date and the date the financial statements are authorized for issue. Under IAS 10, they are classified as either adjusting events (providing evidence of conditions that existed at the balance sheet date) or non-adjusting events (indicating conditions arising after).
How It Works
- Identify events occurring between year-end and the authorization date.
- Decide whether they relate to conditions at the balance sheet date.
- Adjust the financial statements for adjusting events.
- Disclose non-adjusting events when material.
Saudi Context
Saudi listed companies routinely disclose subsequent events such as major contract awards, regulatory developments and Vision 2030-related strategic moves.
Example
A customer’s bankruptcy filed two weeks after year-end, when the financial difficulty already existed at year-end, is an adjusting event and requires writing down the related receivable.