Why this is mistaken
Recast income does not rewrite every later contract, payment, or decision. Apply the consequence's own recognition terms and record it when actually incurred. Disclose the effect when required, but do not call it a direct historical adjustment by association.
Where to watch
When this mistake may appear
- A compensation, royalty, or covenant amount depends on reported income.
Check your work
Your work may contain this mistake if:
- Recomputes the historical consequence without testing when the obligation was incurred.