Accounting Errors

Even though Bedrock's capitalization policy may have been in alignment in prior years, the policy does create a material unadjusted error in the third quarter that would require adjustment. By simply following the Bedrock capitalization policy simply means the quantifying effects of an unadjusted material error would occur, more especially with continuing capital expenditures due to the expansion of the additional quarry and rock finishing plant. The quantifying effects of capital expenses with the expansion alone would result in a material error for the current year, including the third quarter.

The evaluation of materiality must be based on all relative quantitative and qualitative factors. The process begins with quantifying potential misstatements, including prior year misstatements that were not corrected. This also adds the question of whether the capitalization policy has really been in alignment with ASC 250-10 (SAB 108) in prior years. Depending on the capital expenditures in...
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