A Type II subsequent event usually requires:
A)an adjustment to the financial statements and the footnotes.
B)an adjustment to the financial statements but no special disclosure is required.
C)disclosure in the footnotes.
D)neither an adjustment to the financial statements nor disclosure in the footnotes.

Question

Quizplus · Accepted Answer

A Type II subsequent event is a subsequent event that occurs after the balance sheet date and its impact on the financial statements is material and should be disclosed in the footnotes but does not require an adjustment to the financial statements. Therefore, disclosure in the footnotes is required but no adjustment to the financial statements is necessary.

A Type II Subsequent Event Usually Requires