Best examples of subsequent events disclosure examples in 2024–2025

Real‑world examples of subsequent events disclosure examples

Let’s start exactly where accountants, controllers, and auditors actually struggle: what does a good note look like? Below are narrative, realistic examples of subsequent events disclosure examples that mirror the tone and structure you’d see in a 10‑K or audited financial statements.

1. Recognized subsequent event – customer bankruptcy after year‑end

This is the classic adjusting event under ASC 855 and IAS 10: evidence of conditions that existed at the balance sheet date.

Scenario
A major customer representing 18% of year‑end receivables files for bankruptcy on February 10, 2025. The year‑end is December 31, 2024, and the financial statements are issued March 20, 2025. Credit deterioration was clear before year‑end.

Example of disclosure language

Note X – Subsequent Events
On February 10, 2025, one of the Company’s largest customers filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. At December 31, 2024, the Company had trade receivables of \(4.6 million outstanding from this customer. Based on information obtained subsequent to year‑end, management determined that collection of these receivables is not probable. Accordingly, the Company recorded an additional bad debt expense and allowance for doubtful accounts of \)4.6 million in the accompanying 2024 financial statements.

This is one of the best examples of how a recognized subsequent event actually changes the numbers while still requiring clear narrative disclosure.

2. Non‑recognized subsequent event – post‑year‑end acquisition

Now compare that to a non‑adjusting event: conditions arise after year‑end and do not relate to the prior period.

Scenario
On January 25, 2025, the company acquires a competitor in an all‑cash deal. The balance sheet date is December 31, 2024; the deal was not signed or committed by year‑end.

Example of subsequent events disclosure examples – acquisition

On January 25, 2025, the Company acquired all of the outstanding shares of XYZ Technologies, Inc. for total cash consideration of $62.5 million, funded from existing cash and borrowings under its revolving credit facility. XYZ Technologies designs and manufactures specialty components used in the Company’s core product lines. The acquisition will be accounted for as a business combination. Because the transaction occurred after December 31, 2024, no amounts related to this acquisition are included in the accompanying financial statements. The Company is in the process of estimating the fair values of the assets acquired and liabilities assumed.

Notice how the note explains what happened, how it will be accounted for, and why it does not change the current‑year numbers.

3. Subsequent event related to bank failures and liquidity risk

Post‑2023, regulators and auditors have been laser‑focused on liquidity and banking relationships after several high‑profile regional bank failures. This has become one of the most requested examples of subsequent events disclosure examples.

Scenario
A regional bank holding 35% of the company’s cash and short‑term investments is placed into receivership in March 2025, before the financial statements are issued.

Example disclosure

On March 8, 2025, ABC Bank, one of the Company’s primary banking partners, was placed into receivership by U.S. banking regulators. As of December 31, 2024, the Company held \(18.2 million of cash and cash equivalents and \)4.0 million of short‑term investments on deposit with ABC Bank. Subsequent to March 8, 2025, the Company received full access to all insured balances and partial access to previously uninsured balances. Management continues to monitor developments and evaluate its concentration of credit risk with financial institutions. Because the bank receivership occurred after December 31, 2024, no adjustments have been made to the accompanying financial statements.

This kind of language has become standard in 2024–2025 reviews, especially for tech and life‑sciences companies with concentrated deposits.

4. Litigation settlement after year‑end

Lawsuits are another area where preparers search for a clean example of subsequent events disclosure examples.

Scenario
A pending lawsuit existed at year‑end with a disclosed range of possible loss. In February 2025, the case is settled for a specific amount before statements are issued.

Example disclosure – recognized event

As disclosed in Note Y, the Company was a defendant in a lawsuit alleging breach of contract. At December 31, 2024, the outcome of the matter was not probable and reasonably estimable, and no liability was recorded. On February 14, 2025, the Company entered into a settlement agreement under which it agreed to pay \(7.5 million to the plaintiff. Based on this subsequent event, management determined that a loss related to this matter was both probable and reasonably estimable as of December 31, 2024. Accordingly, the Company recorded a litigation settlement expense and related liability of \)7.5 million in the 2024 financial statements.

This is a textbook example of when new information after year‑end changes your assessment of conditions that already existed at the balance sheet date.

5. Natural disaster impacting operations after year‑end

Think hurricanes, wildfires, or floods — events that can materially hit facilities or supply chains.

Scenario
A manufacturing plant is severely damaged by a tornado in January 2025. The plant was fully operational at December 31, 2024.

Example of non‑recognized subsequent event disclosure

On January 19, 2025, a tornado caused significant damage to the Company’s manufacturing facility in Springfield, resulting in temporary suspension of operations at that location. The Company maintains property and business interruption insurance and is working with its insurers to assess the extent of covered losses. Because the tornado occurred after December 31, 2024, no adjustments have been made to the accompanying financial statements. Management is currently evaluating the impact of this event on the Company’s future operating results and cash flows.

You’ll see similar language in filings after major events tracked by agencies such as the National Weather Service and documented in SEC comment letters.

6. Going concern and financing events after year‑end

In a tight credit market, many companies secure emergency financing or breach covenants between year‑end and the issuance date. These are sensitive, high‑judgment areas where auditors look for clear, candid language.

Scenario
The company had substantial doubt about its ability to continue as a going concern at December 31, 2024. In March 2025, it completes a $40 million equity raise that significantly improves liquidity.

Example of subsequent events disclosure examples – going concern

As discussed in Note Z, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Subsequent to December 31, 2024, on March 5, 2025, the Company completed a private placement of common stock, raising net proceeds of $40.2 million. Management believes this financing significantly improves the Company’s liquidity position and its ability to meet obligations as they become due over at least the next 12 months. While this transaction occurred after the balance sheet date and is therefore not reflected in the accompanying financial statements, it is a positive factor considered in management’s going concern evaluation.

This is one of the best examples of how to connect the going concern footnote with a subsequent event without confusing readers about which period the numbers relate to.

7. Subsequent events in fair value measurements and impairments

With higher interest rates and volatile equity markets in 2024–2025, fair value and impairment assessments are under scrutiny.

Scenario
A private equity investment shows signs of impairment at year‑end, but a binding sale agreement is signed in February 2025 at a price below carrying value.

Example disclosure

At December 31, 2024, the Company held a 15% equity interest in a privately held entity, ABC Ventures, accounted for under the measurement alternative. Subsequent to year‑end, on February 22, 2025, the Company entered into a definitive agreement to sell its interest in ABC Ventures for cash proceeds of \(3.0 million. Based on information available as of December 31, 2024, including financial results and market conditions, management concluded that the investment was impaired and recorded an impairment charge of \)2.5 million to reduce the carrying amount to $3.0 million in the 2024 financial statements. The subsequent sale agreement provided additional evidence of fair value at the balance sheet date.

Here the subsequent event provides evidence of fair value at year‑end, driving an adjusting entry — another pattern auditors see regularly.

8. Subsequent events for smaller private companies

Public examples are great, but many readers want an example of subsequent events disclosure examples tailored to a private, closely held business.

Scenario
A privately held manufacturer with a December 31, 2024 year‑end signs a new long‑term supply contract in February 2025 that significantly expands future operations.

Example disclosure for private company

The Company evaluated subsequent events through March 18, 2025, the date the financial statements were available to be issued. On February 10, 2025, the Company entered into a five‑year supply agreement with a new customer with minimum annual purchase commitments of $6.0 million. Because this agreement was executed after December 31, 2024, the related revenues are not reflected in the accompanying financial statements. Management expects this agreement to increase production volumes and capital expenditure requirements beginning in 2025.

This language hits the two big private‑company expectations under U.S. GAAP: stating the evaluation date and describing significant subsequent events.

How to structure your own examples of subsequent events disclosure examples

Once you’ve seen a few real examples, the pattern becomes clear. The strongest examples of subsequent events disclosure examples usually follow a simple structure:

• Date and nature of the event – When it happened and what actually occurred.
• Connection (or lack of connection) to year‑end conditions – Did the condition exist at the balance sheet date?
• Impact on the financial statements – Adjusting vs non‑adjusting; amounts recorded or not recorded.
• Forward‑looking implications – Operational, liquidity, or risk impacts, described without turning the note into MD&A.

Standards like ASC 855 (U.S. GAAP) and IAS 10 (IFRS) support this structure. For background reading, the FASB codification (via licensed access) and educational resources from organizations such as Harvard Business School provide solid conceptual framing, while actual SEC filings show how this plays out in practice.

2024–2025 trends shaping subsequent events disclosures

If you’re writing notes today, you’re not doing it in a vacuum. Several 2024–2025 trends are driving more detailed, specific examples of subsequent events disclosure examples:

Heightened focus on liquidity and banking relationships

After the 2023–2024 regional bank turmoil, auditors are pushing for clearer disclosure of:

• Concentrations of cash at specific institutions
• Access to uninsured balances
• Contingency plans if a bank fails or restricts withdrawals

The bank receivership example above reflects this new normal. Expect more follow‑up questions from audit committees and regulators if your company has significant deposits with a small number of banks.

Supply chain disruptions and geopolitical risk

Companies with global suppliers are increasingly disclosing:

• Factory shutdowns in specific countries after year‑end
• Export controls or sanctions imposed between the balance sheet date and issuance date
• New tariffs or regulatory actions affecting key products

These often show up as non‑recognized events, with narrative around potential future margin or revenue impacts.

Climate and extreme weather events

More frequent extreme weather has turned natural disasters into a recurring theme in the notes. While climate science is outside accounting’s lane, agencies like NOAA document the frequency and severity of events that often trigger subsequent event disclosures.

Typical patterns include:

• Damage to facilities after year‑end
• Insurance recoveries negotiated later
• Decisions to relocate operations based on repeated events

Post‑year‑end capital raises and restructurings

In a higher‑rate environment, many companies are:

• Renegotiating debt covenants after year‑end
• Raising dilutive equity or convertible debt
• Announcing restructuring plans or headcount reductions in Q1

These are fertile ground for examples of subsequent events disclosure examples, especially when they interact with going concern assessments.

Practical tips for drafting high‑quality disclosures

You don’t need to copy these examples word‑for‑word, but you can borrow their structure and tone.

Be specific, not vague.
“Subsequent to year‑end, the Company experienced certain events” is useless. Name the event, the date, and the nature of the impact.

Quantify where possible.
Amounts, percentages, and ranges help users assess materiality. If you can’t quantify yet, explain why and what you’re still assessing.

Avoid forecasting in the note.
Stick to factual statements about the event and its known or reasonably estimable impact. Forward‑looking commentary belongs in MD&A or management reports, not in the audited note.

Align with your going concern and risk disclosures.
If a subsequent event affects liquidity, covenants, or major customers, make sure your risk factors and going concern analysis tell a consistent story.

For additional context on how investors and analysts use this information, academic resources from universities such as MIT can be helpful, especially on market reactions to post‑balance sheet events.

FAQ: Common questions on examples of subsequent events disclosure examples

Q1. Can you give a simple example of a subsequent events disclosure for a small business?
A small retailer with a December 31 year‑end signs a new store lease on February 1. A straightforward note might say: “On February 1, 2025, the Company entered into a five‑year lease for a new retail location with annual base rent of $180,000. Because the lease was executed after December 31, 2024, no related assets or liabilities are reflected in the accompanying financial statements.” This is a clean, practical example of how a non‑recognized event is described.

Q2. How many subsequent events need to be disclosed?
There’s no fixed number. You disclose events that are material to users of the financial statements, either because they change the numbers (recognized events) or because they significantly affect the company’s future position (non‑recognized events). Immaterial events are documented in your subsequent events procedures but not necessarily disclosed.

Q3. How do auditors evaluate examples of subsequent events disclosure examples?
Auditors look for clear evidence that management evaluated events through the issuance date, documented their assessment, and distinguished between adjusting and non‑adjusting events. They also compare your disclosures to board minutes, legal letters, bank correspondence, and public announcements to ensure nothing material is missing.

Q4. Are subsequent events handled differently under IFRS and U.S. GAAP?
The concepts are very similar. IFRS uses the terms “adjusting” and “non‑adjusting” events after the reporting period (IAS 10), while U.S. GAAP (ASC 855) talks about “recognized” and “non‑recognized” subsequent events. The examples of subsequent events disclosure examples in this article translate well to both frameworks, with minor wording tweaks.

Q5. Do private companies need to disclose the date through which subsequent events were evaluated?
Yes, under U.S. GAAP private entities disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or available to be issued. Public companies generally do not include this statement because the issuance date is already clear from the filing.

If you treat these examples of subsequent events disclosure examples as templates — not scripts — you’ll be able to craft notes that satisfy auditors, inform investors, and, just as important, actually make sense to anyone reading your financial statements.