[CPA Dex]

I know you adjust retained earnings retrospectively in earlier periods, but how far back do you go? My book says as of the beginning of the earliest year presented. I’m wondering if that means the very first year the company was in business, or maybe the first year the transaction originally hit the books.

[Minimorty]

Neither. It means the earliest year presented. If you are preparing an audited statement for 2009 and 2020, you'll need to go only as far back as you need to so that your beginning retained earnings for 2009 is properly stated.

[Anonymous]

Are you using Becker? My book says the same thing! LOL. I think that it means if you are presenting comparative financial statements that you have to adjust the earliest year that is presented that is being compared to the current financial statements.

[Author]

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