Unconscious distortion of memory as dictated by one’s present psychological needs. This distortion happens over time and is due to the fact that the person is re-telling it and adding/embellishing the story. These added bits include speculations and you may notice that the person claims two conflicting events happened at the same time or perhaps a place has been changed. The new details have been invented without any care about whether they are correct or not. People who retrospectively falsify a story also tend to embellish the positive and delete the negative aspects of the situation.
Example: A business deal goes sour and litigation ensues over the partners’ differing recollections of their original verbal agreement.