Accounting Changes And Error Correction


DEFINITION of 'Accounting Changes And Error Correction'

Requirements for the accounting for and reporting of a change in accounting principle, change in accounting estimate, change in reporting entity or the correction of a transaction. Accounting Changes and Error Correction is a pronouncement made by the Financial Accounting Standards Board (FASB) and is a Statement of Financial Accounting Standards (SFAS). It outlines the rules for correcting and applying changes to financial statements. This pronouncement, Number 154, replaced FASB Statement No. 3 and the Accounting Principle Board (APB) Opinion No. 20. It was issued in May 2005.

BREAKING DOWN 'Accounting Changes And Error Correction'

The two primary accounting standards bodies, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), have different interpretations of accounting rules and principles but do work together to create some uniformity when possible. The Accounting Changes and Error Correction pronouncement is similar to the IASB's "Accounting Policies, Changes in Accounting Estimates and Errors" released in 2003.

  1. Accounting Principles

    The rules and guidelines that companies must follow when reporting ...
  2. Statement of Financial Accounting ...

    A formal document issued by the Financial Accounting Standards ...
  3. Financial Accounting Standards ...

    A seven-member independent board consisting of accounting professionals ...
  4. Accounting Change

    A change in accounting principles, accounting estimates, or the ...
  5. International Accounting Standards ...

    An older set of standards stating how particular types of transactions ...
  6. Accountant

    A professional who performs accounting functions such as audits ...
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    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
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