dentify if the following changes are an accounting policy change (P), an accounting estimate change (AE), or an error (E). Item • The useful life of a piece of equipment was revised from five years to six years. • An accrued litigation liability was adjusted upwards once the lawsuit was concluded. • An item was missed in the year-end inventory count. • The method used to depreciate a factory machine was changed from straight-line to declining balance when it was determined that this better reflected the pattern of use. • A company adopted the new IFRS for revenue recognition. • The accrued pension liability was adjusted downwards as the company's actuary had not included one employee group when estimating the remaining service life. • The allowance for doubtful accounts was adjusted upwards due to current economic conditions. • The allowance for doubtful accounts was adjusted downwards because the previous estimate was based on an aged trial balance that classified some outstanding invoices into the wrong aging categories. • A company changed its inventory cost flow assumption from LIFO to FIFO, as the newly appointed auditors indicated that LIFO was not allowable under IFRS.
Identify if the following changes are an accounting policy change (P), an accounting estimate change (AE), or an error (E).
Item
• The useful life of a piece of equipment was revised from five years to six years.
• An accrued litigation liability was adjusted upwards once the lawsuit was concluded.
• An item was missed in the year-end inventory count.
• The method used to
• A company adopted the new IFRS for revenue recognition.
• The accrued pension liability was adjusted downwards as the company's actuary had not included one employee group when estimating the remaining service life.
• The allowance for doubtful accounts was adjusted upwards due to current economic conditions.
• The allowance for doubtful accounts was adjusted downwards because the previous estimate was based on an aged
• A company changed its inventory cost flow assumption from LIFO to FIFO, as the newly appointed auditors indicated that LIFO was not allowable under IFRS.
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