Errors in Retrospective Application of Accounting Estimates for Impairment Loss
National Housing Authority · 2022
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What Happened?
Category: Financial ManagementIssue: Accounting ErrorImpairment losses were improperly calculated and incorrectly charged directly to accumulated surplus instead of the current period's surplus or deficit, significantly misstating financial statement balances.
Why It Matters
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Original Audit Finding Excerpt
"Error in retrospective application of changes in accounting estimates and inconsistent application of existing accounting policy on provision of impairment loss resulted in the understatement of Allowance for Impairment loss, Impairment loss, and Accumulated surplus by P2.945 billion, P3.788 billion and P843.599 million, respectively, for the identified Receivables accounts in arrears."