The file does not begin with “records are old.” It records the procedures performed, systems and archives searched, and specialists consulted. It also identifies required estimates, unsupported assumptions about historical intent, and any inability to separate contemporaneous information from hindsight.
Impracticability can be period-specific. If cumulative effects are supportable but some period effects are not, application begins at the earliest period for which the required information is practicable. If even the cumulative effect cannot be determined, the new principle begins at the earliest practicable date. The supplied conclusion and the alternative method are disclosed; the spreadsheet cannot create the conclusion from missing cells.
Meet the evidence test
ASC 250-10-45-9 limits impracticability to stated conditions. They include failure after every reasonable effort, unsupported assumptions about management intent, and estimates that cannot be separated from hindsight. ASC 250-10-45-10 focuses the estimate test on information that would have been available at the earlier date.
Cost, inconvenience, staff turnover, or an old system may explain why the work is hard. They do not alone meet the rule. Record each attempted recovery path and why it failed. Then identify the earliest date at which the supported method can be applied.
Put the concept to work
Understand this concept
- Distinguish the supplied Topic 250 impracticability conditions from cost, effort, inconvenience, or missing documentation alone.
Apply this concept
- Audit a supplied impracticability conclusion for reasonable effort, independent support, hindsight risk, earliest practicable date, and required disclosure.
Learning resources
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Build on these ideas
- Impracticability of retrospective application — Understand
To apply this concept: Required. The audit uses the actual conditions rather than a convenience test.
- Retrospective application — Understand
To understand this concept: Required. The exception is meaningful only against the retrospective requirement.
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Use this idea next
- Impracticability of retrospective application — Apply
Required level here: understand. Required. The audit uses the actual conditions rather than a convenience test.