Prior year adjustments in accounting books and financial statements
Journal Title: Zeszyty Teoretyczne Rachunkowości - Year 2011, Vol 2011, Issue 60
Abstract
According to the Accounting Act, the accounting books shall be kept true, fault-less, verifiable, updated, whereas the financial statements shall honestly and clearly present the financial position, performance and financial result of an entity. This requirement means, among others, that every occurrence concerning a certain reporting period should be entered into the accounting books of this period, and every material information should be included in the financial statements. However, in the accounting practice, various errors occur in the recording of transactions that are not always immediately detected. The aim of the article is to show how – in the light of the Accounting Act and In-ternational Financial Reporting Standards – to reflect the discovered errors of the previous years in the accounting books and the financial statements of an entity. The article starts with general description and classification of the errors of the previous years. Next, it presents methods of treatment of such errors in the ac-counting books and in the financial statements depending on their significance and time of detection – before or after the approval of the financial statements for a given financial year. Particular topics are illustrated by practical examples.
Authors and Affiliations
Dorota Mikulska
Keywords
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