Subsequent Events Compliance with Advanced Accounting Tools

Posted In | Finance | Accounting Software

Keeping financial statements accurate and up-to-date is crucial for businesses to maintain transparency and adhere to regulatory requirements. One aspect that organizations need to focus on is the treatment of subsequent events, as governed by ASC 855. Navigating the complexities of ASC 855 can be challenging, but advanced accounting tools can make the process significantly easier. This article will delve into the benefits of using advanced tools to comply with ASC 855 and provide an overview of some leading solutions in the market.

 

Understanding ASC 855

ASC 855, Subsequent Events, is an accounting standard issued by the Financial Accounting Standards Board (FASB) that provides guidance on the evaluation and reporting of events occurring after the balance sheet date but before the financial statements are issued or available to be issued. ASC 855 classifies subsequent events into two categories:

 

  1. Recognized subsequent events: Events that provide additional evidence about conditions that existed at the balance sheet date, requiring adjustments to the financial statements.

 

  1. Non-recognized subsequent events: Events that provide evidence about conditions that arose after the balance sheet date, requiring disclosure in the financial statements but not adjustments.

 

Challenges in ASC 855 Compliance

Organizations face multiple challenges when it comes to ASC 855 compliance, including:

 

  1. Timely identification: Identifying subsequent events in a timely manner is crucial for accurate financial reporting and compliance with ASC 855.

 

  1. Complex evaluations: Determining whether a subsequent event is recognized or non-recognized can be complicated, requiring a deep understanding of the accounting standard.

 

  1. Disclosure requirements: Organizations must ensure that proper disclosures are made in the financial statements, in line with ASC 855 guidelines.

 

Benefits of Advanced Accounting Tools for ASC 855 Compliance

Utilizing advanced accounting tools can help organizations overcome these challenges and reap the following benefits:

 

  1. Automation: Advanced tools automate the identification and categorization of subsequent events, reducing manual effort and human errors.

 

  1. Standardized approach: These tools provide a standardized approach to evaluating subsequent events, ensuring consistent application of ASC 855 requirements.
     

  2. Streamlined disclosures: Advanced accounting tools facilitate streamlined and accurate disclosures in financial statements, in compliance with ASC 855.

 

  1. Real-time insights: By offering real-time insights into the impact of subsequent events on financial statements, advanced tools enable better decision-making.


Complying with ASC 855 is critical for organizations to maintain accurate financial statements and uphold their regulatory responsibilities. Advanced accounting tools offer a streamlined and efficient approach to subsequent events compliance, enabling organizations to focus on their core business activities. By investing in these solutions, businesses can ensure timely identification, evaluation, and disclosure of subsequent events, in line with ASC 855 requirements.