When material, type 1 subsequent events require disclosure and type 2 subsequent events require adjustment.

Question

Quizplus · Accepted Answer

Type 1 subsequent events (those that provide evidence of conditions that existed at the balance sheet date) require adjustment of the financial statements, while Type 2 subsequent events (those that provide evidence of conditions that arose after the balance sheet date) require disclosure, if material.

When Material, Type 1 Subsequent Events Require Disclosure and Type