Which of the following events would not be treated as a subsequent event?
A)settlement of litigation between the year end and the issuance of the financial statements
B)sale of a business segment between the year end and the issuance of financial statements
C)recalculation of estimated salvage values for property and equipment
D)stock split occurring ten days after the end of the fiscal year

Question

Quizplus · Accepted Answer

Recalculation of estimated salvage values for property and equipment is not a subsequent event because it is a correction of an error in a prior period and should be recorded retrospectively in the financial statements. The other events are subsequent events that would require disclosure or adjustment in the financial statements.

Which of the Following Events Would Not Be Treated as a Subsequent