3‑70 Adjustment—prior period errors and 3‑70 Adjustment—prior period errors and changes in accounting principles

3‑70 Adjustment—prior period errors and changes in accounting principles

(1) Subsection (2) applies if there has been a change in the opening equity of a Constituent Entity at the start of a Fiscal Year. (2) In computing the Constituent Entity’s GloBE Income or Loss for the Fiscal Year, adjust the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year so as to include the amount of that change to the extent the change is attributable to: (a) a correction of an error in the financial accounts for a previous Fiscal Year that affected the income or expenses includible in computing the Constituent Entity’s GloBE Income or Loss for the previous Fiscal Year, except to the extent the correction resulted in a material decrease to a liability for Covered Taxes subject to Part 4‑6 (Post‑filing Adjustments and Tax Rate Changes); or (b) a change in accounting principle or policy that affects income or expenses includible in computing the Constituent Entity’s GloBE Income or Loss for a Fiscal Year.