Why do companies have revisions?

There are many potential reasons why companies revise previously reported amounts. For example, if a company has discontinued operations and got rid of a portion of their business, for comparison purposes, they would revise the previously reported amounts. Similarly, a company may adopt a new accounting policy, and again, for comparison purposes, they would revise previously reported amounts. An obvious case, is when the company has a restatement. A restatement would cause the company to revise previously reported amounts.

However, it is not always clear why companies revise previously reported amounts. In some cases, the revisions are not explained by the company. Some consider revisions an indicator of risk.

It should be clear that revisions may or may not cause a company to restate previously issued financial statements. In general, if the revisions are material, a company would restate prior financial statements.