What do I do when I made a prior period error (restatement)

This can happen, so what do we do

Accounting Standard AASB 108

Accounting Policies, Changes in Accounting Estimates and Errors

The paragraphs we found helpful are pasted below with notes.

Paragraph 41 & 42 - errors 

Errors can arise in respect of the recognition, measurement, presentation or disclosure of elements of financial statements. 

Financial statements do not comply with Australian Accounting Standards if they contain either material errors or immaterial errors made intentionally to achieve a particular presentation of an entity’s financial position, financial performance or cash flows. 

Potential current period errors discovered in that period are corrected before the financial statements are authorised for issue. 

However, material errors are sometimes not discovered until a subsequent period, and these prior period errors are corrected in the comparative information presented in the financial statements for that subsequent period (see paragraphs 42–47).

So yes, we fix the comparative period balances. 

Subject to paragraph 43, an entity shall correct material prior period errors retrospectively in the

first set of financial statements authorised for issue after their discovery by:

(a) restating the comparative amounts for the prior period(s) presented in which the error

Occurred;

or

(b) if the error occurred before the earliest prior period presented, restating the opening

balances of assets, liabilities and equity for the earliest prior period presented.

Paragraph 49 - Disclosure of prior period errors

In applying paragraph 42, an entity shall disclose the following:

1. (a) the nature of the prior period error;
2. (b) for each prior period presented, to the extent practicable, the amount of the correction:
   1. (i) for each financial statement line item affected; And
3. 1. (ii) if AASB 133 applies to the entity, for basic and diluted earnings per share;
4. (c) the amount of the correction at the beginning of the earliest prior period presented; and
5. (d) if retrospective restatement is impracticable for a particular prior period, the circumstances that led to the existence of that condition and a description of how and from when the error has been corrected. Financial statements of subsequent periods need not repeat these disclosures.

So we can just insert a narrative or a table. 

Must include ALL line items. 

Example:

INfoxchange - ACNC Large Charity (AASB 1060)