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FASB Makes Decisions Regarding Subsequent Events

Published on: 11 Feb 2010

At its February 10 meeting, the FASB voted to approve the issuance of the Accounting Standards Update, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements (the “ASU”). The following is a summary of the decisions reached at the Board meeting:

  • An entity whose financial statements are originally issued as filed or furnished with the SEC (or a regulator if such filing satisfies the SEC’s requirements) is to perform a subsequent-events evaluation through the date the financial statements are issued. This definition does not include an entity’s financial statements that are included in an SEC registrant’s filing under other SEC rules (e.g., Regulation S-X, Rules 3-05 and 3-09, etc). Therefore, the date disclosed in that entity’s financial statements will remain unchanged and no further evaluation of subsequent events on those financial statements will be required under GAAP when included in a registrant’s filing. An entity who is a conduit debt obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets) is also required to perform a subsequent-events evaluation through the date the financial statements are issued.  All other entities are required to perform an evaluation of subsequent events through the date the financial statements are available to be issued.
  • An entity whose financial statements are filed or furnished with the SEC (or a regulator if such filing satisfies the SEC’s requirements) is not required to disclose in its financial statements the date through which subsequent events have been evaluated.  All other entities are required to disclose the date through which subsequent events are evaluated.
  • The ASU will be effective upon issuance for originally issued and reissued financial statements. However, for conduit debt obligors the effective date will be deferred until fiscal years ending after June 15, 2010.
  • When an entity has revised financial statements, the entity is required to disclose the date in its revised financial statements through which the subsequent-events evaluation was performed unless the entity’s financial statements are originally issued as filed or furnished with the SEC. Revised financial statements include financial statements revised as a result of either 1) a restatement or 2) the retrospective application of U.S. GAAP.

Stay tuned for an upcoming Deloitte Heads Up article once the ASU is published.

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