[MantisAlfredo]

Why are financial statements that are prepared on the Cash Basis in conformity with a comprehensive basis of accounting other than generally accepted accounting principles, if when you are reporting a change in the F/S from Cash to Accrual basis it is treated retrospectively as a correction of error, due to the Cash Basis not being in conformity with GAAP? Seems contradictory to me.

[Anonymous]

because if it's not GAAP it's an error-as far as I remember. I might be wrong…

[MantisAlfredo]

That is right, the part that I get confused on are questions that ask if F/S are in conformity with a comprehensive basis of income and include Cash Basis (as well as regulatory, contractual, or income tax basis), if Cash Basis is not allowed under GAAP.

[Anonymous]

it is still an allowable basis of accounting even though it's not GAAP….I think it's says not allowed under GAAP unless the results are substantially the same as with GAAP.

[Author]

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