Q. Excess provision write back

Question

What should be the treatment for the excess provision made last year and write back in current year. Should it required adjustment in restated financial statement of last year or should it be adjusted through retained earning in current year and impact on last year tax provision

Answer 1

1. If it is change of estimates: prospective impact i.e. current year PL adjustment

2. If it is material error: Financial statements -Restatement of the year in which error happen