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There are two types of subsequent events: Adjusting events. An event that provides additional information about pre-existing conditions that existed on the balance sheet date. Non-adjusting events. A subsequent event that provides new information about a condition that did not exist on the balance sheet date.

Subsequent Event Reporting A business combination. Changes in the value of assets due to changes in exchange rates. Destruction of company assets. Entering into a significant guarantee or commitment. Sale of equity. Settlement of a lawsuit where the events causing the lawsuit arose after the balance sheet date.

What is a Subsequent Event? A subsequent event is an event that occurs after a reporting period, but before the financial statements for that period have been issued or are available to be issued. Depending on the situation, such events may or may not require disclosure in an organization's financial statements.

An example of a type I event is litigation where the event leading to the claim occurred during one year, but is settled during the following year. The settlement provides subsequent evidence about the value of the then-pending claim at year-end.

There are generally two types of subsequent events. 1)The first is a recognized event whereas the second is a non-recognized event. Recognized or type 1 subsequent events are typically events that occurred at the financial statement date.

Subsequent events clarify information about a business' financial picture as reflected by the balance sheet, a financial report that includes all transactions through the report date.

Companies categorize accounting events as either internal or external events.