What a change in accounting? What characterizes a change in accounting estimateversus a change in principle?a) It must be approved by shareholdersb) It requires retroactive application to all prior periodsc) It affects future periods only and doesn't requirerestatementd) It only applies to depreciation methods

I am answering using requirements of both IFRS and US GAAP. The answer does not change, but the…

Answered: What characterizes a change in…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 7GI

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Explain the accounting treatment in the event that an impairment review of a non-current asset which has been previously revalued with a revaluation surplus revealed that the non-current asset has suffered an impairment loss.
Which of the following would appear as a prior period adjustment? Group of answer choices a correction in the calculation of earnings per share of a prior period a material difference between the actual and estimated uncollectible accounts receivable a material loss resulting from the sale of fixed assets which were acquired in a prior period material error in the computation of depreciation expense in the Year 1 that was discovered and corrected in the Year 3
what happen when different depreciation methods are used in different financial year? Does it have any effect on the financial statements? if yes explain and if no explain in details
10. Changes in amortization method, useful life, and residual value are changes in accounting estimates and are accounted for a. prospectively. b. retrospectively. C. a or b d. not accounted
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Which one of the following statements is true? a. Financial statement readers cannot determine whether the depreciation method used by a company is appropriate. b. Financial statement readers can determine the useful lives of assets depreciated during the reported period. c. Financial statement readers cannot determine the depreciation expense for the reported period d. Financial statement readers can accurately estimate the effect an alternative depreciation method would have on income.
Which of the following statements related to long-lived assets is true? Depreciation is calculated the same for financial reporting purposes and income tax purposes. If a company changes a depreciation estimate, it does not require a prior period adjustment. Depreciation is the process to value an asset at its fair market value. There is only one test to record an asset's impairment.
Indicate with the appropriate letter the nature of each situation described below: Type of Change PR PP E Change in principle reported retrospectively Change in principle reported prospectively Change in estimate Change in estimate resulting from a change in principle Change in reporting entity EP R N Not an accounting change Situation 1. Change from declining balance depreciation to straight-line. 2. Change in the estimated useful life of office equipment. 3. Technological advance that renders worthless a patent with an unamortized cost of $45,000. 4. Change from determining lower of cost or net realizable value (LCNRV) for the inventories by the individual item approach to the aggregate approach. 5. Change from LIFO inventory costing to the weighted-average inventory costing. 6. Settling a lawsuit for less than the amount accrued previously as a loss contingency. 7. Including in the consolidated financial statements a subsidiary acquired several years earlier that was appropriately…
is the temporary differrence of depreciation between financial accounting and taxation puposes favorable or unfavorable ?
Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.
Current Attempt in Progress Which of the following disclosures is not required for a change from LIFO to FIFO? O indirect effect impact related to the change in accounting principle O the cumulative effect on prior years, net of tax, in the current retained earnings statement O restated prior year income statements O the justification for the change

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What characterizes a change in accounting estimate versus a change in principle? a) It must be approved by shareholders b) It requires retroactive application to all prior periods c) It affects future periods only and doesn't require restatement d) It only applies to depreciation methods