Yakub02
Banned
Limitation on retrospective restatement
A prior period error must be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error.
Period specific effect It might be impracticable to determine the effect of correcting an error in comparative information for one or more prior periods presented.
For example, it might be impracticable to determine the impact on profit for the prior year. In this case a company must restate the carrying amounts of assets and liabilities (and therefore equity) as at the beginning of the earliest period for which retrospective restatement is practicable.
This may be the current period. Cumulative effect It might be impracticable to determine the cumulative effect, at the beginning of the current period, of correcting an error in all prior periods, In this case a company must correct the error prospectively from the earliest date practicable.
Disclosure of prior period errors The following information must be disclosed:
the nature of the prior period error;
for each period presented in the financial statements, and to the extent practicable, the amount of the correction for each financial statement item and the change to basic and fully diluted earnings per share;
the amount of the correction at the beginning of the earliest prior period in the statements (typically, a the start of the previous year); and
if retrospective re-statement is not practicable for a prior period, an explanation of how and when the error has been corrected.
A prior period error must be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error.
Period specific effect It might be impracticable to determine the effect of correcting an error in comparative information for one or more prior periods presented.
For example, it might be impracticable to determine the impact on profit for the prior year. In this case a company must restate the carrying amounts of assets and liabilities (and therefore equity) as at the beginning of the earliest period for which retrospective restatement is practicable.
This may be the current period. Cumulative effect It might be impracticable to determine the cumulative effect, at the beginning of the current period, of correcting an error in all prior periods, In this case a company must correct the error prospectively from the earliest date practicable.
Disclosure of prior period errors The following information must be disclosed:
the nature of the prior period error;
for each period presented in the financial statements, and to the extent practicable, the amount of the correction for each financial statement item and the change to basic and fully diluted earnings per share;
the amount of the correction at the beginning of the earliest prior period in the statements (typically, a the start of the previous year); and
if retrospective re-statement is not practicable for a prior period, an explanation of how and when the error has been corrected.