Error Corrections

Question 1

For a correction of an error, IFRS requires that the following be disclosed

Answer 1

The nature of the error

The correction to specific line items and earnings per share

The amount of the correction at the beginning of the earliest period presented

Question 2

When it comes to Depreciation expense and Accumulated Depreciation with Restatement at beginning of the year.

Answer 2

Depreciation expense would not be adjusted at the beginning of the year. Accumulated depreciation would be adjusted at the beginning of the first year presented in the financial statements. Retained earnings would be also be restated at the beginning of the first year presented in the financial statement

Question 3

What are three criteria for a prior period adjustment?

Answer 3

(1) the effect of the adjustment is material to income from continuing operations,
(2) the adjustment can be identified with a prior period, and
(3) the amount of the adjustment could not be estimated in prior periods

Question 4

Under IFRS reporting, prior period error includes

Answer 4

arithmetic mistakes

accounting policy application mistakes

and recognition, measurement, presentation, and disclosure mistakes

Changing Accounting policies is NOT an Error