Which of the following characteristics does not relate to prior period adjustments?
A. They have a material effect on income from continuing operations of the current year.
B. They can be specifically identified with business activity of a prior period.
C. They could not have been reasonably estimated in a prior period.
D. They are attributable to economic events occurring subsequent to prior period financial statements.
Answer:D
D is corrent. There are three criteria for a prior period adjustment. These criteria are as follows: (1) the effect of the adjustment is material to income from continuing operations, (2) the adjustment can be identified with a prior period, and (3) the amount of the adjustment could not be estimated in prior periods. ASC Topic 250 does not require that a prior period adjustment be attributable to economic events occurring subsequent to the prior period financial statements.