Accounting Changes And Error Correction

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Accounting Principles

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

    A seven-member independent board consisting of accounting professionals ...
  3. International Accounting Standards ...

    An older set of standards stating how particular types of transactions ...
  4. Statement of Financial Accounting ...

    A formal document issued by the Financial Accounting Standards ...
  5. Accounting Change

    A change in accounting principles, accounting estimates, or the ...
  6. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
Related Articles
  1. Fundamental Analysis

    What are the differences between a change ...

  2. Fundamental Analysis

    How should an accountant correctly record ...

  3. Retirement

    Footnotes: Early Warning Signs For Investors

  4. Bonds & Fixed Income

    Accounting Rules Could Roil The Markets

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center