Intermediate Accounting, 10 Ed
Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
Question
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Chapter 20, Problem 20.1Q
To determine

Accounting changes:

Accounting changes are the alterations made to the accounting methods, accounting estimates, accounting principles (or) the reporting entity.

To classify: Categories of accounting changes.

Expert Solution & Answer
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Explanation of Solution

Accounting changes are categorized into following types:

  1. 1. Change in principle:  It refers to adaptation of one acceptable accounting method to another.
  2. 2. Change in estimate: It refers to a change where the new information influences the companies to update the previously made estimates.
  3. 3. Change in reporting entity: It refers to a change when two (or) more entities comprise together into a single entity for reporting purposes.

Thus, above are the accounting changes.

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