In preparing the financial statements, the accountant may do some types of errors which is called accounting errors. In order to resolve this matter, IAS 8 requires the entity to correct the error by restating its financial statement via retrospective effect.


  • Omission to charge depreciation on fixed assets
  • Overstating or understating opening or closing stock or inventory figures
  • Including capital expenditure in the income statement believing it as revenue expenditure.

Types of Accounting Errors

  • Omission error – It means not recording the transaction altogether,
  • Commission error – it means an error in calculation such as adding the figure when it actually needs to be substracted,
  • GAAP error – it means an error in following the accounting principle.

Accountant need to make adjustment retrospectively only when the amount is material.

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