One of multiple ways of a management’s intervention to correct an accounting error (particularly, immaterial error) that, rather than restating comparative financial statements, involves recognizing an adjustment in the opening balance of retained earnings of the current period by means of a correcting entry. Concurrently, the reporting entity discloses information, in the current period’s financials, about the line items that are impacted by the error and correction of error, using, as in the case of changed accounting estimates, both the old accounting policy and the new one.

Catch-up adjustments involve accounting for, and recognizing, the “cumulative effect” of an error in current period’s earnings and ending net assets, without recasting/ restating prior period figures.