FASB Statement No. 16 requires that corrections of errors be handled prospectively and shown in the current operating section of the income statement in the year the correction is made.

Question

Quizplus · Accepted Answer

FASB Statement No. 16 does not address corrections of errors in this manner. Corrections of errors are typically handled retrospectively, not prospectively, and involve restating prior period financial statements, not just showing the correction in the current period's income statement.