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.

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RELATED FAQS
  1. What are the differences between a change in accounting principle and a change in ...

    Learn how to differentiate between a change in accounting principle and a change in accounting estimate and how accountants ... Read Answer >>
  2. How should an accountant correctly record and report a change in an accounting estimate?

    Read about how the FASB treats a change in accounting estimate and what businesses are required to report or disclose when ... Read Answer >>
  3. How should a change in accounting principle be recorded and reported?

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