FASB ASC Research ProblemsFASB ASC Structure. Each ASC reference is structured as a series of four numbers: a three-digit Topic (the first digit of which represents an Area), a two-digit Subtopic, a two-digit Section, and a two- or three-digit Paragraph.Accounting Changes & Error CorrectionsA client wishes to change the method by which it values inventory from FIFO to average because it believes average will provide more relevant information and, as result, is preferable. Identify the location in professional standards that indicates when a reporting entity should change an accounting principle.Give the ASC reference numbers for the statement above.

Name: FASB ASC Research ProblemsFASB ASC Structure. Each ASC reference is st
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Description: FASB ASC Research ProblemsFASB ASC Structure. Each ASC reference is structured as a series of four numbers: a three-digit Topic (the first digit of which represents an Area), a two-digit Subtopic, a two-digit Section, and a two- or three-digit Paragr

A client wishes to change the method by which it values inventory from FIFO to average because it believes average will provide more relevant information and, as result, is preferable. The above change is a change in accounting estimate. Change in accounting estimate is considered in AS 5. Any changes in accounting estimates required full disclosure in the footnotes of the financial statements to describe the justification and effects. These footnotes help the user of financial statements to take the decision wisely and analyse the things as per their comfort. Change in accounting estimates is required when: 1. Affects the carrying amount of an existing asset or liability or 2. Alters the subsequent accounting for existing or future assets or liabilities. ASC 250 provides that a change in accounting estimate that is effected by a change in accounting principle is accounted for change in estimate. It is referred as ASC that addresses the correction of an error in financial statements that has been issued or maintained earlier.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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FASB ASC Research Problems

FASB ASC Structure. Each ASC reference is structured as a series of four numbers: a three-digit Topic (the first digit of which represents an Area), a two-digit Subtopic, a two-digit Section, and a two- or three-digit Paragraph.

Accounting Changes & Error Corrections

A client wishes to change the method by which it values inventory from FIFO to average because it believes average will provide more relevant information and, as result, is preferable. Identify the location in professional standards that indicates when a reporting entity should change an accounting principle.

Give the ASC reference numbers for the statement above.

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