A material mistake or omission from the accounts of a business, which is not a recurring adjustment or the correction of an accounting estimate made in a prior period.
A prior period adjustment is an accounting term used to describe a correction to an error in previously issued financial statements. These adjustments are necessary to accurately reflect the financial status of a company or organization.
Retroactive adjustment refers to the process of restating prior years' financial statements to present financial data on a comparable basis as necessitated by accounting error corrections, changes in accounting principles, or other significant financial recalibrations.
