Skip to content Menu

On June 13, the Governmental Accounting Standards Board (GASB) issued Statement No. 100, Accounting Changes and Error Corrections. Statement 100 amends Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, to address diversity in applying existing standards in practice.

The new standard defines four categories of accounting changes and error corrections and related accounting and financial reporting requirements:

  1. Changes in accounting principle must be reported retroactively by restating prior periods.
  2. Changes in accounting estimate must be reported prospectively by recognizing the change in the current period.
  3. Changes to and within the financial reporting entity must be reported by adjusting beginning balances of the current period.
  4. Error corrections result from mathematical mistakes, misuse of information, or misapplication of accounting principle and should be reported retroactively by restating prior periods.

The statement also addresses display of accounting changes and error corrections in the financial statements, disclosures in the notes to the financial statements, and presentation in required supplementary information and supplementary information. For example, Statement 100 requires that governments disclose the effects of each accounting change and error correction on beginning balances in tabular format.

Note that this statement does away with the term “prior period adjustment.” Transactions previously reported as prior period adjustments are now incorporated into one of the four categories noted above.

Statement 100 is effective in FY24. Earlier application is encouraged.

Contact

Chris Leach

Accounting Policy Analyst

202.861.2566

Contact

Sue Menditto

Senior Director, Accounting Policy

202.861.2542


Related Content

Department of Education Encourages Using HEERF for Mental Health Needs

During Mental Health Awareness Month, the Department of Education released an FAQ that strongly encourages institutions to use HEERF funds to meet mental health and substance abuse disorder needs of students. Additional information can be found at NACUBO’s HEERF Resource Center.

GASB Releases Statement 101 on Compensated Absences

In an effort to bring all types of compensated absences under a unified model, the Governmental Accounting Standards Board recently issued Statement No. 101, Compensated Absences. The new guidance will lead to recognition of a liability in more circumstances, most notably for nonvested sick leave.

ED to Release New HEERF Quarterly Reporting Form

The form will be released this week and is required for quarterly reports due in July. In a major change, the new form will combine reporting for HEERF student aid and institutional aid awards.