What is defined as a "subsequent event" in accounting?

A "subsequent event" in accounting is defined as an event that occurs after the balance sheet date but before the financial statements are issued, and it has a significant impact on the financial statements' accuracy or relevance. This means any events that occur up to the point when the financial statements are released need to be considered, as they could alter the financial picture depicted in those statements.

Option B accurately reflects this definition because it emphasizes that the event occurs after the balance sheet date and affects the accuracy of the financial statements. Subsequent events can be categorized into two types: recognized events, which provide additional information about conditions that existed at the balance sheet date, and non-recognized events, which pertain to conditions that arose after that date but may still warrant disclosure.

In contrast, the other options do not capture the true essence of subsequent events. Events occurring during the fiscal year do not qualify as subsequent events because they happen before the balance sheet date. An annual financial review process is unrelated to subsequent events, as it typically refers to the overall evaluation of financial activities rather than specific events after the balance sheet date. Similarly, a successful investment decision does not pertain to the definition of subsequent events in accounting, as it focuses on decision-making