Prior Period Adjustment reflected on Schedule M-2 Form 1120

While filing the 2018 income tax for an 1120 I found that there had been errors made in 2016 and 2017.  On the 2018 Schedule M-2 do I show the change in retained earnings on line 3 and line 6 as "Prior Period Adjustments"?  Maybe there is a better way to reflect the change. 

Also, do I net the amounts from each year?    For each year 2016 and 2017 there are two errors.   Maybe I should say "Prior Period Adjustment year 2016" then "Prior Period Adjustment Year 2017".

Thank you.


4 people found this helpful

If the errors are piddly, wash them through 2018.  If they are significant, then you should go back and amend 2016 and 2017.

Was this answer helpful? Yes No
IRonMaN , Yote of Steel - rusty steel

No answers have been posted

More Actions

People come to Accountants Community for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: