prior period adjustment


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prior period adjustment

Correction of a material mistake in reported income in an earlier financial statement. Although prior period adjustments affect retained earnings, they are not used to alter income in the current period.
References in periodicals archive ?
Prior period adjustments * Prior period adjustments (e.
3 million compared to an unfavorable prior period adjustment of $3.
The Company is conducting, but has not completed, an analysis of the materiality of the change in accounting treatment for the interest rate swap entered into in March 2010 for its 2010, 2011 and 2012 financial results and whether any prior period adjustments would be necessary.
Recommendation: To help assure that prior period adjustments are properly identified and reported in the CFS, the the Secretary of the Treasury should direct the Fiscal Assistant Secretary to enhance the SOP entitled "Analyzing Agency Restatements" to fully document all procedures related to identifying, analyzing, and reporting restated closing package data as well as changes in accounting principles.
The bank's capital adequacy improved to barely above the regulatory minimum due to prior period adjustments, but a capital increase is due for the current fiscal year with further increases planned following that, in order to meet the objective of a Basel II capital adequacy ratio of 12%.
16, Prior Period Adjustments, in June 1977, resolution of many uncertainties required restating the original financial statements in the period in which the uncertainty was resolved.
Line 19 requires the taxpayer to list "[e]xtraordinary items and prior period adjustments.
Any material gains and losses under consideration for reporting, however, should be closely analyzed to determine if they are either the result of 1) improper estimates that were biased or not based upon reasonable assumptions and the best information available at the time they were made or last adjusted (and therefore constitute errors, the correction of which require presentation under GAAP as prior period adjustments pursuant to ASC 250-1045-24) or 2) current changes in estimated lives or salvage values attributable to changes in circumstances that should be accounted for either currently or prospectively as a change in estimate, with all required disclosures, pursuant to ASC 250-10-45-17 and 250-1050-4.
Specifically, the footnote disclosure related to the restatements was titled Prior Period Adjustments, which could be misinterpreted since most of the corrections discussed in the note were not prior period adjustments.
Although most unusual items are disclosed in the income statement, an exception is made for prior period adjustments due to errors.
In the fourth quarter of 2009, Medicare Advantage operating income included negative prior period adjustments of $2.
3 million, which excludes any prior period adjustments associated with the investigation into the accounting matter described previously.
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