Summary of Statement No. 16
Prior Period Adjustments (Issued 6/77)
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.