Subsequent Event

[suhb-SEE-kwuhnt ih-VENT]

What is the definition of Subsequent Event?

A material event that occurs after the end of the accounting period but before the publication of an entity's financial statements, which may affect the financial statements and is disclosed in the notes to the financial statements.

Using Subsequent Event in an Example

A company may experience a significant legal settlement after the close of the fiscal year but before the financial statements are issued. This is considered a subsequent event and must be disclosed in the notes of the financial statements to inform stakeholders of events that could impact the financial understanding of the company.

Using Subsequent Event in a sentence

During the review of the draft financial statements, the CFO mentioned that they needed to include a note about the subsequent event of acquiring a smaller competitor last week.

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