Subsequent event
What is a subsequent event in a set of accounts, and why does a lender care?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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A subsequent event is something that happens between the balance date and the day the accounts are signed — a lost contract, a declined facility, a major customer's failure — that either changes the numbers or has to be disclosed beside them. A lost bank facility goes straight to going concern. A lender reads the note, and reads its absence: accounts signed silent on an event the bank knows about were signed on an incomplete picture, and the lender's next question is what else the auditor was not told.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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