FASB Issues Statement of Financial Accounting Standards (SFAS) 165, Subsequent Events
6/19/2009
Effective for Interim and Annual Periods Ending After June 15, 2009
The purpose of SFAS 165, Subsequent Events, is to establish a general standard of accounting for the disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, SFAS 165 outlines the following:
- The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements
- The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements
- The disclosures that an entity should make about events or transactions that occurred after the balance sheet date.
Most important to note is that SFAS 165 does not change the kinds of events that an entity must recognize or disclose in its financial statements. It does, however, require the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, i.e., whether the date represents the date the financial statements were issued or were available to be issued.
For assistance or further information about these FASB pronouncements, please contact Kenneth Nielsen Goldmann, J.H. Cohn Partner and SEC and Capital Markets Practice Director, by email or at (973) 618-6232.