Where a fundamental error occurs in the recognition process:
A)it is not necessary to restate the prior period comparatives;
B)the error may be amended prospectively;
C)it may be deferred an recognised in the subsequent period;
D)a retrospective correction must be made.

Question

Quizplus · Accepted Answer

When a fundamental error occurs in the recognition process, a retrospective correction must be made. This means that the prior period comparative figures must be restated to reflect the correction. Simply amending the error prospectively or deferring recognition to the subsequent period is not sufficient to address the impact of the error on the financial statements. Therefore, option D is the correct choice.

Where a Fundamental Error Occurs in the Recognition Process