The Ministry of Finance ("MOF") has recently issued the Government Accounting Standards No. X – Accounting Adjustments (Draft for Comment) (the "Draft for Comment") to solicit opinions from the units concerned by May 21, 2018.
The Draft for Comment sets out rules on how to make the accounting treatment for variations to accounting policies, changes to accounting estimates, corrections of accounting errors and matters arising after the reporting date. The Draft for Comment clearly states that when it is unable to reasonably determine the cumulative effects, attributed to variations to accounting policies, subjects under the government accounting standards are required to adopt the prospective application method; they do not need to calculate the cumulative effects caused by changes to accounting policies or adjust the opening balance of relevant items in financial statements and relevant items in comparative financial statements. Moreover, the Draft for Comment provides that if any subject under government accounting standards abuses accounting policies, accounting estimates, or variations thereto, the abuse shall be taken as the serious accounting errors and the subject has to make corrections thereto. Furthermore, opinions of six questions are solicited on the Draft for Comment, including "whether these standards involve adequate disclosure of accounting adjustments? If not, please specify your advice for improvements".