Prior Period Adjustment
Barron's Business Dictionary:
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Prior Period Adjustment
In accounting, charge that relates to a previous year that should have no effect on the current year, such as the collection or payment of money arising from litigation of an event that occurred in the past. Once made by changing retained earnings , accountants should consult the most recent statement of the Financial Accounting Standards Board for instructions.
| Printout, Printer, Principle | |
| Prior Service Cost, Prior-Preferred Stock, Priority |
Barron's Accounting Dictionary:
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Prior Period Adjustment
Revenue or expenses applicable to a previous period. The beginning balance of retained earnings is adjusted for the prior period adjustment (net of tax). An illustrative retained earnings section of the balance sheet follows:
The only two examples of prior period adjustments are: (1) the correction of an error made in a prior year; and (2) the recognition of a tax loss carryforward benefit arising from a purchased subsidiary.
The only two examples of prior period adjustments are: (1) the correction of an error made in a prior year; and (2) the recognition of a tax loss carryforward benefit arising from a purchased subsidiary.
| Principal, Prime Rate, Prime Cost | |
| Prior Service Pension Cost, Private Accountant, Private Companies Practice Section (PCPS) |
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Barron's Business Dictionary
Dictionary of Business Terms. Copyright © 2007 by Barron's Educational Series, Inc. All rights reserved.
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