Accounting changes and error corrections under US GAAP 2021 KPMG Handbook

Using Q&As and examples, this KPMG guide explains in depth how to identify, account for and present the different types of accounting changes and error corrections.


All entities

Relevant dates

Effective immediately

Key impacts

  • Accounting changes comprise changes in accounting principle (mandatory or voluntary), changes in accounting estimates and changes in reporting entity.
  • Mandatory changes in accounting principle (e.g. to adopt an ASU) follow the specifically mandated transition.
  • Voluntary changes in accounting principle and reporting entity generally require comparative financial information to be adjusted.
  • Unless mandated, an accounting principle can only be changed if the new principle is ‘preferable’.
  • A material prior-period error is corrected by restating and reissuing the prior-period financial statements. An error can be material by its size and/or its nature.

Report contents

  • Scope and materiality
  • Accounting changes
  • Error corrections
  • Interim reporting
  • SEC registrants

Download from KPMG Financial Reporting View

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