More than two years after the Securities and Exchange Commission published advice on how to correct errors in financial statements, questions still abound, says John May, a partner at PricewaterhouseCoopers.

SEC staff published Staff Accounting Bulletin No. 108 in 2006 to change the way companies viewed and acted on immaterial errors left lingering in prior period financial statements. Before SAB 108, it was customary for companies to use either the “rollover” method to fix mistakes in the income statement or the “iron curtain” method to correct problems in the balance sheet. SAB 108 instructed companies to use both methods.

It’s not necessarily the correction methods that lead to questions, says May. Instead, it’s the materiality assessment. Companies often puzzle, for example, on when and how to correct an error if it’s considered material in the aggregate, but not for any single financial statement period. “We’ve determined it would have been material under the iron curtain method, but it isn’t material under the rollover method,” says May. “What do we do? It’s a subtle point, but an important one.”

PwC published some guidance of its own to highlight a speech delivered late last year by SEC Associate Chief Accountant Mark Mahar to address questions about SAB 108 and materiality. Mahar walked through an example of a company that finds an improper expense accrual of $100 that has built up at a rate of $20 a year over the course of five years. The error isn’t material to any individual year, but by the time it is discovered in year 5, the $100 error is material.

SAB 108 says the error must be corrected, said Mahar, but it also notes the correction does not require an amendment to previously filed reports. “Said another way, if a restatement of previously issued financial statements is required, but such restatement would not result in the previous year financial statements changing materially, than the company can restate those financial statements the next time they are presented without amendment to the previous filings or the issuance of an Item 4-02 8-K,” he said. That’s the standard alert, of course, to let investors know that a previously issued financial statement isn’t reliable.

PwC’s May says companies are unclear at times about when and how to correct errors they find. “It’s the distinction between there being an error that needs to be corrected and what the effect of the correction is,” he says. “If the effects of the correction aren’t material, even though you might have to restate at some point, it doesn’t mean you have to rush out and file an amendment today. Investors can continue to rely on them.”