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Standards
Summary of Statement No. 16
Prior Period Adjustments (Issued 6/77)
Summary
This Statement limits adjustments of previously issued annual
financial statements to correction of a material error and
recognition of certain income tax benefits relating to
preacquisition loss carryforwards of a purchased subsidiary. It
restricts adjustments of prior interim period (quarterly) financial
statements of the current fiscal year to the settlement of certain
transactions that are material in amount, that can be specifically
identified with business activities of a prior interim period, and
that could not be estimated prior to the current interim period.
The method of allocating interim period adjustments is also
described in this Statement.