Prior period financial statements containing error

What can be done if an error occurs in published financial statements?

By Ádám Mihály, Audit Director of HLB Hungary

29 September 2025

hibás beszámoló

Under ideal accounting practices, the concept of prior period financial statements containing error should not exist, as accuracy and reliability are fundamental expectations for any published financial report. Nevertheless, situations may arise where financial statements that have already been approved and filed later prove to contain either formal or substantive errors. Although the Hungarian Act on Accounting generally does not allow the correction or replacement of financial statements after official publication, there are a few exceptional cases where rectification is possible.

When can prior period financial statements containing error be corrected? 

•  If the published financial statements were not approved by the company’s supreme body (e.g., general meeting): In such cases, the reports can be reclassified as inactive, and new financial statements containing the correct data can be uploaded. The inactive versions of the prior period financial statements containing error will still remain accessible for reference.

•  If the data in the financial statements do not match the company's official registry information: For example, if the published reports do not belong to the company indicated by its contents, the Hungarian Company Information Service (Céginformációs Szolgálat) will detect the discrepancy and initiate removal. The person who submitted the financial statements will be notified electronically, and the national tax authority will also receive notification. In this case, the financial statements are deemed not to have been submitted, and the company is obligated to submit the correct financial statements.

In the case of accounting errors in published financial statements, they cannot be resubmitted or corrected retroactively. Instead, the error must be corrected in the bookkeeping records, and its effect must be disclosed in the financial statements of the following financial year, depending on the materiality of the error.

Types of accounting errors

Hungarian accounting standards distinguish between two types of errors:

•  immaterial errors

•  material errors

Each company must define the threshold of significance in its accounting policies. However, by law, any errors (and their cumulative impact) are considered material if:

•  the total impact (regardless of sign) of the errors and their effects identified in a year exceeds 2% of the total assets of the audited year, or

•  if 2% of total assets is less than HUF 1 million, then the threshold is automatically set at HUF 1 million.

Correction of material vs. immaterial errors 

•  Immaterial errors: These are relatively straightforward to correct. The necessary adjustments are made in the current year’s books, and the impact of the error on the profit/loss appears in the income statement of the reporting-year. To ensure transparency, the error and its correction must be briefly disclosed in the notes to the financial statements.

•  Material errors: These require more comprehensive handling. Three-column comparative financial statements must be prepared for the current year, showing the previous year’s data, the current year’s data, and a separate column for adjustments arising from material errors from prior years. Material errors and their impacts must be presented in the supplementary notes per balance sheet and income statement item. If additional information is needed, explanations must be provided alongside the numbers.

Impact of prior period financial statements containing error

To summarise: Hungarian law does not allow financial statements to be revised after they have been filed and published. This creates a material drawback: if a material error is identified in the published report, users of it are provided with, or rely upon, misleading information. The true and fair view of the company’s financial position can only be restored with the publication of the following year’s financial statements.

This article is for general information purposes only and should not be considered as advice.

Get in touch
Whatever your question our team will point you in the right direction
Start the conversation