prior year adjustments

prior year adjustments

adjustments applicable to prior years arising from changes in ACCOUNTING PRINCIPLES, for example the use of a different DEPRECIATION rule for fixed assets. Prior year adjustments are made to ensure that previous years' accounting results (recalculated on the basis of the new accounting policy) are consistent with those of the current year (measured on the same new basis).
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It was further informed that tariff determined by NEPRA was based on the revenue requirement of the sector split into prior year adjustments (PYA) and future revenue requirements.
The cost of circular debt, line losses and prior year adjustments etc was worked out at Rs2.82 per unit.
The prior year adjustments for 2015-16 were notified by the federal government on March 22, 2018.
ISLAMABAD -- The National Electric Power Regulatory Authority (Nepra) has completed the process of tariff determinations for six Discos and allowed Prior Year Adjustment (PYA) to the ex-WAPDA Discos which will enable them to transfer the burden of Rs 120 billion to the electricity consumers.
The additional impact of the prior year adjustment for fiscal year 2017-18 on account of difference in power purchase prices for four quarters was mostly arising out of the additional capacity payments and increased net hydel profit to the provinces.
"The board's decision to remove Mr Taylor followed their conclusion that certain of the prior year adjustments made in the 2005 accounts should have been presented as a correction of fundamental errors and not as changes in accounting policy," the group said.
Presumably, all or a substantial portion of the interest expense arose from prior year adjustments to their Schedule F.
An official explained that the combined impact of all previous outstanding issues that were pending in courts or at various levels of settlement or late notifications on account of prior year adjustments (PYA), capacity payments, net hydel profit and additional power purchases was worked out at Rs200bn.
Separately, another Rs80bn allowance was granted to Discos on account of higher losses, prior year adjustments and debt write-offs etc.