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Archive for the ‘Accounting’ Category

In the course of a year may be found mistakes in the preparation of the budget of any previous year. Article 2423 of the Civil Code establishes the principle of true and correct. How to behave, then, if you detect errors in accounting?

An error is the improper or non-application of an accounting or nell’inesattezza mathematical calculations or interpretation of the facts. Are not considered errors, however, changes in estimates. Imagine, for example, calculated on the estimated recoverability of a claim. This assessment may be subject to amendments to change the status of the information on the solvency of the debtor.

An error should be corrected immediately when it detects even though it refers to previous years. They are divided into two broad categories: non-determinative and decisive. Error correction is not decisive by adjusting the account that at the time the error was concerned with contra account extraordinary income and expenses. Among the errors include all errors of such significance as to the financial statements unreliable. In this case, alternative solutions may be those charged to the income statement correcting the error or the current year, although the solution used in very rare cases, correct the budgets of previous years. If the choice falls on the correction of previous budgets, the correction will be used only with the reconstruction of the budget year in which the error was committed and all subsequent ones, in accordance with the principle of continuity, they reflect the effects.

If error correction is not conclusive, the editor of the budget has the right to provide information about the corrections made during the year for errors related to prior periods. This may become liable in case of errors for which must state the reasons on such appropriate and comprehensive correction of the error about the nature and amount of the correction made in the current and what would be needed in the years earlier.