The Kimmee Company is a publicly traded firm that will file its 2020 annual report (10-K) with
Question:
The Kimmee Company is a publicly traded firm that will file its 2020 annual report (10-K) with the SEC on February 27, 2021. On Feb. 5, 2021, a fire completely destroyed one of Kimmee’s manufacturing facilities and the loss from the fire is a material amount. Kimmee Company’s controller expects that the fire loss should be considered an unrecognized subsequent event in the reporting of the 2020 financial statements because the fire loss did not occur until 2021. Is the controller correct that the fire is considered an unrecognized subsequent event?
REQUIRED:
a. Answer the question and support your answer by providing the complete citation to the most relevant paragraph or subparagraph of the FASB’s Accounting Standards Codification.
b. Copy and paste in the portion of the FASB’s Accounting Standards Codification that you cited in 1a.
Expert Answer:
1a As per Statement of Financial Accounting Standards No 165 an entity shall not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet ... View the full answer
