Home  Journals  International Accounting  30(324) - 2014 August

Correction of errors: from "red-ink" entry to cumulative effect according to IFRS and RAS

Available online: 11 August 2014

Subject Heading: On the way to international standards

JEL Classification: 

Pages: 2-10

Nowadays Russia makes focused efforts to approximate the Russian Accounting Standards (RAS), including Accounting Regulation "Correction of errors in accounting and financial statements" (PBU 22/2010), to the International Financial Reporting Standards. In this context the comparative analysis of IFRS and RAS has recently become more essential. The objective of this work is to study the content of PBU 22/2010 "Correction of errors in accounting and financial statements", to compare it with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", and to describe the key features of the PBU. The article considers recording the implications of error correction in accounting statements using the comparative analysis of IAS 8 and PBU 22/2010. The author has compared the provisions of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" and PBU 22/2010 "Correction of errors in accounting and financial statements", identified the main difference between the PBU and its international counterpart, considered the procedure for reflecting error correction in accounting records and financial statements, and studied the accounting treatment of retrospective restatement of accounting errors. The author concludes that there is almost full compliance of PBU 22/2010 and IAS 8 to the extent of recording significant errors of previous periods, and notes a high level of methodological support for reflecting retrospective restatement compared to retrospective application of accounting policies.

Keywords: financial error, financial statements, cumulative effect

References:

1. Order of the Ministry of Finance of the Russian Federation “On Implementing International Financial Reporting Standards and interpretations of the International Financial Reporting Standards in the Russian Federation” of November 25, 2011 № 160n. (In Russ.)
2. Order of the Ministry of Finance of the Russian Federation “On Approval of accounting regulations” of November 06, 2008 № 106n. (In Russ.)
3. Order of the Ministry of Finance of the Russian Federation “On Approval of Accounting Regulation “Correction of errors in accounting and financial statements” of June 28, 2010 № 63n. (In Russ.)
4. Shkareva I.P. Uchetnaya politika organizatsii i posledstviya ee izmeneniya [Accounting policy of an organization and consequence of its variation]. Mezhdunarodnyi bukhgalterskii uchet – International accounting, 2013, no. 30, pp. 8–14.

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