Effective June 15, 2009—SFAS No. 165, Subsequent Events

The FASB has issued SFAS no. 165, Subsequent Events. It is effective for interim or annual financial periods ending after June 15, 2009. It applies to the accounting for and disclosure of subsequent events but does not apply to subsequent events or transactions that are within the scope of other applicable generally accepted accounting principles (GAAP) that provide different guidance on the accounting treatment for subsequent events or transactions.

This Statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It sets forth:

1. 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.
2. The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements.
3. The disclosures that an entity should make about events or transactions that occurred after the balance sheet date.
   

Change to Current Practice

SFAS no. 165

1. Should not result in significant changes in the subsequent events that an entity reports—either through recognition or disclosure—in its financial statements.
2. Does introduce the concept of financial statements being available to be issued.
3. Requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or were available to be issued.
   
   

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