Finantskorrektsioonid

Finantskorrektsioonid, often translated as financial adjustments or corrections, refer to the processes and actions taken to rectify errors or inaccuracies within financial statements, accounting records, or financial transactions. These corrections are essential for maintaining the integrity and reliability of financial information, which is crucial for decision-making by stakeholders such as investors, creditors, and management.

The need for financial corrections can arise from various sources. These include unintentional accounting errors, misclassifications of transactions, misinterpretations of accounting standards, or even fraudulent activities. Errors can occur in the recording of revenues, expenses, assets, or liabilities. Adjustments may also be necessary due to changes in accounting policies, the discovery of new information that impacts previous estimates, or the need to comply with updated regulatory requirements.

The process of financial correction typically involves identifying the error, determining its impact on the financial statements, and then making the necessary adjustments. Depending on the nature and materiality of the error, corrections might be made retrospectively, meaning that prior period financial statements are restated to reflect the corrected figures. This is particularly common for significant errors that affect comparability across periods. For less material or current period errors, adjustments might be made in the current period's financial statements. Transparency in reporting these corrections is vital, often requiring disclosures in the notes to the financial statements explaining the nature of the error and its impact.