Handbooks | October 2020

 

Insight

Handbook: Accounting changes and error corrections

The new KPMG in-depth guide to the accounting and presentation requirements of ASC 250.

Julie Santoro

Julie Santoro

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-1086

Brian Fields

Brian Fields

Partner, Dept. of Professional Practice, KPMG US

+1 212-872-3397

Tim Phelps

Tim Phelps

Partner, Dept. of Professional Practice, KPMG US

+1 212 872 3249


Using Q&As and examples, this guide explains in depth how to identify, account for and present the different types of accounting changes and error corrections.

Applicability

  • All entities

Relevant dates

  • Effective immediately

 Key impacts

  • Accounting changes comprise changes in accounting principle (mandatory or voluntary), changes in accounting estimates and changes in reporting entity.
  • Mandatory changes in accounting principle (e.g. to adopt an ASU) follow the specifically mandated transition.
  • Voluntary changes in accounting principle and reporting entity generally require comparative financial information to be adjusted.
  • Unless mandated, an accounting principle can only be changed if the new principle is ‘preferable’.
  • A material prior-period error is corrected by restating and reissuing the prior-period financial statements. An error can be material by its size and/or its nature. 

Report contents

  • Scope and materiality
  • Accounting changes
  • Error corrections
  • Interim reporting
  • SEC registrants

Subscribe to our newsletter

Receive timely updates on accounting and financial reporting topics from KPMG.

Receive timely updates on accounting and financial reporting topics from KPMG.

ARO

Use our Accounting Research Online for financial reporting resources.

Use our Accounting Research Online for financial reporting resources.