1FAS 154 provides an exception to the requirement for retroactive restatement when it is impracticable to make the restatement. This exception is only permitted to be used under specified conditions.
2This is generally limited to (a) presentation of consolidated or combined financial statements instead of financial statements of individual entities, (b) a change in the specific subsidiaries making up a group of entities for which consolidated financial statements are presented, and (c) changing the entities included in combined financial statements. Neither a business combination under FAS 141 nor consolidation of a variable interest entity under FIN 46R is considered a change in reporting entity.
3The word “restatement” is only to be used to describe and/or present corrections of prior period errors.