Which of the following statements is true regarding correcting errors in previously issued financial statements prepared in accordance with International Financial Reporting Standards? a. The error can be reported in the current period if it’s not considered practicable to report it retrospectively. b. The error can be reported in the current period if it’s not considered practicable to report it prospectively. c. The error can be reported prospectively if it’s not considered practicable to report it retrospectively. d. Retrospective application is required with no exception.

Question
Asked Jan 23, 2020
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Which of the following statements is true regarding correcting errors in previously issued financial statements prepared in accordance with International Financial Reporting Standards? a. The error can be reported in the current period if it’s not considered practicable to report it retrospectively. b. The error can be reported in the current period if it’s not considered practicable to report it prospectively. c. The error can be reported prospectively if it’s not considered practicable to report it retrospectively. d. Retrospective application is required with no exception.

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Expert Answer

Step 1

IFRS: 

International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.

Step 2

To identify: The following statement is true regarding correcting errors in previously issued financial statements prepared in accordance with IFRS.

The following statement is true regarding correcting errors in previously issued financial statements prepared in accordance with IFRS

Option (a) is the true statement.

The error can be reported in the current period, if it is not considered practicable to report it retrospectively.

Step 3

Explanation: 

Option (a): The error can be reported in the current period if it is not considered practicable to report it retrospectively

As per IFRS norms, the error can be reported in the current period, if it is not considered practicable to report it retrospectively. It is correcting the errors in previously issued financial statements so it is the correct answer.  

Option (b): The error can be reported in the current period if it is not considered practicable to report it prospectively because it won’t correct errors in previously issued financial statements prepared in accordance with IFRS so it is the wrong answer.

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