This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

ASC 250 — Accounting Changes and Error Corrections

Below is an overview of FASB Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections, as well as a list of FASB Accounting Standards Updates (ASUs) and proposed ASUs related to this Topic.

Overview

ASC 250 provides guidance on the accounting for and reporting of accounting changes and error corrections. ASC 250-10 notes the following:

 

An accounting change can be a change in an accounting principle, an accounting estimate, or the reporting entity. This Subtopic establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to a newly adopted accounting principle. This Subtopic provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable.

The correction of an error in previously issued financial statements is not an accounting change. However, the reporting of an error correction involves adjustments to previously issued financial statements similar to those generally applicable to reporting an accounting change retrospectively. Therefore, the reporting of a correction of an error by restating previously issued financial statements is also addressed by this Subtopic.

This Subtopic also:

  1. Specifies the method of treating error corrections in comparative statements for two or more periods
  2. Specifies the disclosures required when previously issued statements of income are restated
  3. Recommends methods of presentation of historical, statistical-type financial summaries that are affected by error corrections.

The full text of ASC 250 can be found in the FASB Accounting Standards Codification (link to the FASB's Web site; registration required). Also, the full text of the Codification and Deloitte-authored Q&As related to the Codification are available in the Deloitte Accounting Research Tool (DART) Web site (subscription required).

Content from the FASB Accounting Standards Codification® included at http://www.usgaapplus.com is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, and is reproduced with permission.

FASB Accounting Standards Updates

    The following ASUs amended the guidance in this Topic:

    Proposed FASB Accounting Standards Updates

      Correction list for hyphenation

      These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.