diff --git a/pallets/market/src/lib.rs b/pallets/market/src/lib.rs
index 220013aca..0884a6ea8 100644
--- a/pallets/market/src/lib.rs
+++ b/pallets/market/src/lib.rs
@@ -380,6 +380,10 @@ pub mod pallet {
             unsuccessful: BoundedVec<(DealId, DealSettlementError), MaxSettleDeals<T>>,
         },
         /// Deal was slashed.
+        /// It means that the `provider_collateral` was burned and the entire client's lockup returned.
+        ///
+        /// Currently it's emitted only when a deal was supposed to be activated on a given block, but was not.
+        /// [`Hooks::on_finalize`] checks deals and slashes them when necessary.
         DealSlashed(DealId),
 
         /// Deal has been terminated.
@@ -1418,6 +1422,8 @@ pub mod pallet {
                             log::error!(target: LOG_TARGET, "on_finalize: invariant violated, cannot slash the deal {}", deal_id);
                             continue;
                         };
+
+                        Self::deposit_event(Event::<T>::DealSlashed(deal_id));
                     }
                     DealState::Active(_) => {
                         log::info!(
diff --git a/pallets/market/src/test.rs b/pallets/market/src/test.rs
index 561076164..a0f622ea7 100644
--- a/pallets/market/src/test.rs
+++ b/pallets/market/src/test.rs
@@ -967,6 +967,16 @@ fn verifies_deals_on_block_finalization() {
         );
 
         assert!(!DealsForBlock::<Test>::get(&bob_start_block).contains(&bob_deal_id));
+        assert_eq!(
+            events(),
+            [
+                RuntimeEvent::Balances(pallet_balances::Event::<Test>::Withdraw {
+                    who: Market::account_id(),
+                    amount: 15
+                }),
+                RuntimeEvent::Market(Event::<Test>::DealSlashed(bob_deal_id))
+            ]
+        )
     });
 }