The Financial Accounting Standards Board has issued Statement No. 154, Accounting Changes and Error Corrections, a replacement of Accounting Principles Board Opinion No. 20 and FASB Statement No. 3

Healthcare Financial Management, July, 2005

The Financial Accounting Standards Board has issued Statement No. 154, Accounting Changes and Error Corrections, a replacement of Accounting Principles Board Opinion No. 20 and FASB Statement No. 3. The statement applies to all voluntary changes in accounting principles, and modifies the requirements for the accounting for and reporting of a change in accounting principle.

FASB believes that Statement 154 improves financial reporting because its requirements enhance the consistency of financial information between periods. The statement is effective for accounting changes and corrections of errors made in fiscal years beginning after Dec. 15, though earlier application is permitted. To read FASB Statement 154, go to www.fasb.org/pdf/fas154.pdf.