Retrospectively or Prospectively?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Retrospectively or Prospectively?
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Step 1
As per the general principal of IAS 8 an entity must correct all material prior period errors retrospectively.
However, if the period specific effect of error is not identifiable then opening balance of the asset, liability, and equity for which retrospective restatement is required should be adjusted.
Further, if the cumulative impact of the error is not determinable then prospective adjustments should be made.
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