Retrospec
Retrospective application refers to the application of a different accounting principle to recast previously issued financial statements—as if the new principle had always been used.
Question 3Select one:
Retrospective application entails re-entering past financial data as though the newly chosen accounting system had been used consistently in previous reporting periods. This retrospective adjustment is intended to provide financial reporting consistency and comparability, allowing stakeholders to comprehend the company's financial performance over time with the new accounting principle in force. When substantial accounting changes occur, retrospective application is frequently required to give accurate and trustworthy financial reporting.
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