Section PS 2120 - Accounting changes

Effective date:

September 1, 1997

Published by the PSAB:

September 1997


This Section establishes standards on how to account for and disclose:

  • Change in an accounting policy - Accounting policies encompass the specific principles and the methods used in their application that are selected by a government in preparing financial statements. There is a general presumption that the accounting policies followed by a government are consistent within each accounting period and from one period to the next. However, a change in an accounting policy may be made: to conform to new Public Sector Accounting Standards; to adopt Public Sector Accounting Standards for the first time; or, if it is considered that the change would result in a more appropriate presentation of events or transactions in the financial statements of the government.
  • Change in an accounting estimate - Changes in estimates used in accounting are the necessary consequences of the periodic preparation of financial statements. Estimating, requires the exercise of judgment and reappraisal as new events occur, as more experience is acquired, or as additional information is obtained.
  • Correction of an error – Correction of an error in prior period financial statements is required when on rare occasions when an unintentional error is so material that the financial statements of prior periods can no longer be considered to have been fairly presented at the date of their issue. The amount of the correction of an error that impairs the fairness of financial statements of prior periods should be reported retroactively. Comparative information should be restated, unless it is impracticable to do so.

History of Section PS 2120




September 1997

New Section

This new Section deals with the accounting treatment of a change in accounting policy, a change in accounting estimate, and a correction of an error relating to prior period financial statements.

Note: The above summary does not include details of consequential amendments made as the result of other projects.

Public Sector Accounting Discussion Group meetings

  • January 7, 2014 - Section PS 2120: Adjustments Made in a Period Subsequent to Identification of an Accounting Error

Correction list for hyphenation

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