So you sold something with below their cost and earned a loss because of it. Does it affect your prior year or prior period results?

Most probably you’re saying “no”, however, to be correct, if your prior period results are still open and had you known you’d make a loss, you would have recognized the loss as a provision on the balance sheet at the time (expense at the end as well), you should correct the prior periods. 

What mostly happens is that a sale with loss is made in current period and prior to finalizing the Annual Report. It should be taken into consideration when it comes to management estimates in the financial statements. Management estimates should take into account all known information at the time of making the estimate (which is the preparation date of the statements). It is known that some of the goods are not recognized in their accurate value, that is lower of cost or net realisable value. As such, considering the definition of management estimate and the period the loss relates to really, you should go back and make the adjustment there. Obivously however if the period is closed, the financial statements prepared and approved, it’s current period’s loss. Rethink however if the information was actually present at the time of the preparation. If so, you might be facing adjusting comparative information when preparing next year’s financial statements.