Difference between restatement and retrospective?

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  • #184732
    MustPass1988
    Member

    I have a question that is probably really stupid but I need to know the answer- In Becker, it says that changes in accounting principle, changes in accounting entity, and corrections of error are all retrospective changes. Then I came across a question in the MCQs asking which one needed to be ‘restated’…so I’m confused and I don’t want to be tripped up over a stupid question when I take the exam. Thanks for your help!

    AUD: PASSED [81]; Expired, retaking August 23rd
    BEC: PASSED [83]; Expired, retaking July 11th
    REG: PASSED [83]
    FAR: FAILED [64]; Retaking May 23rd

Viewing 4 replies - 1 through 4 (of 4 total)
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  • #541868
    Anonymous
    Inactive

    @mustpass1988 I was just looking at this today. I believe that you restate prior periods in the event that an accounting error occurred. If comparative statements are issued and the error is from one of those years, correct the error (restate prior period) and if that year is not displayed then restate beginning retained earnings for the earliest year presented, net of tax. Thats what the “prior period adjustment” is.

    #541899
    Anonymous
    Inactive

    @mustpass1988 I was just looking at this today. I believe that you restate prior periods in the event that an accounting error occurred. If comparative statements are issued and the error is from one of those years, correct the error (restate prior period) and if that year is not displayed then restate beginning retained earnings for the earliest year presented, net of tax. Thats what the “prior period adjustment” is.

    #541870
    MustPass1988
    Member

    Oh okay, that makes sense. I wish they could just make it clear in the book so that when you do the MCQs, you don't get even more confused over something that should be simple. Ha! Thanks for the help!

    AUD: PASSED [81]; Expired, retaking August 23rd
    BEC: PASSED [83]; Expired, retaking July 11th
    REG: PASSED [83]
    FAR: FAILED [64]; Retaking May 23rd

    #541900
    MustPass1988
    Member

    Oh okay, that makes sense. I wish they could just make it clear in the book so that when you do the MCQs, you don't get even more confused over something that should be simple. Ha! Thanks for the help!

    AUD: PASSED [81]; Expired, retaking August 23rd
    BEC: PASSED [83]; Expired, retaking July 11th
    REG: PASSED [83]
    FAR: FAILED [64]; Retaking May 23rd

Viewing 4 replies - 1 through 4 (of 4 total)
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