Accounting Changes and Error Corrections F31-14b
Under what conditions is the retrospective approach not applied?
The retrospective approach is not to be applied if any of the following applies:
- After making a reasonable effort to apply the principle to prior periods, the entity is unable to do so.
- Assumptions about management’s intent in prior periods are required and such assumptions cannot be independently substantiated.
- Retrospective application requires estimates of amounts based on information that was unavailable in the prior periods or on circumstances that did not exist in the prior periods.
