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What Is a Prior-Period Adjustment? How and When Is a Prior-Period

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What is a prior-period adjustment? How and when is a prior-period adjustment recorded?


Definitions:

Discount

A reduction from the usual cost of something, often expressed as a percentage off the original price.

Convertible Bond

A financial instrument that allows the bondholder to convert the bond into a predetermined number of shares of common stock of the issuing company.

Market Value

The dollar amount required to replace the inventory as of the inventory date.

Stock Selling

The process of disposing shares of a company to investors in exchange for capital, also referred to as stock trading when done frequently.

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