Subsequent-collection evidence is cash received after the reporting date and evaluated for what it shows about conditions that existed at that date. The population, cutoff, entity type, policy election, and remaining exposure must be controlled.
Map cash to reporting-date assets
Match each receipt to a customer, invoice, and reporting-date balance. Separate cash on new sales, deposits, disputed items, recoveries, and balances that were not part of the measured population. State the information cutoff and preserve uncollected exposure.
If a $20,000 year-end invoice is paid in January, that receipt is strong evidence about that invoice. It does not automatically reduce every similar invoice's expected loss to zero or replace a lifetime method with a cash-received-through-January method.
Check current policy and authority
ASU 2025-05 includes targeted paths involving later collection information. Their use depends on scope, entity type, election, period, adoption, and the stated assumptions. Document these facts before applying the update. Connect later information to reporting-date conditions under the subsequent-events framework.
Boundary and source
Later cash can confirm old conditions or reflect a new event. Read ASC 855-10-25-1 and ASC 855-10-25-3 for that distinction, and ASC 326-20-30-10E for the applicable targeted path.
Put the concept to work
Understand this concept
- Explain the reporting-date condition, information cutoff, policy consistency, practical-election boundary, and why later cash does not automatically replace an expected-loss method.
Analyze this concept
- Analyze subsequent cash by customer, invoice, cutoff, reporting-date condition, entity type, elected policy, and remaining uncollected exposure.
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Build on these ideas
- Subsequent event — Understand
To understand this concept: Required. Later collections must be connected to the reporting-date condition.
- Subsequent-collection evidence — Understand
To analyze this concept: Required. Application follows the evidence and election boundaries.
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Use this idea next
- Subsequent-collection evidence — Analyze
Required level here: understand. Required. Application follows the evidence and election boundaries.