Explanation Accounting changes: When a company requires to sacrifice the consistent accounting methods and procedures, to enhance the usefulness and relevance of the accounting information, those changes are referred to as accounting changes. Such inevitable accounting changes decrease the comparability and consistency of accounting information. The reasons for accounting changes could be new methods introduced by FASB (Financial Accounting Standards Board), changes in accounting principles, and changes in accounting estimates. The following are the three types of accounting changes: Change in an accounting principle Change in an accounting estimate Change in a reporting entity Methods of reporting accounting changes: Retrospective adjustment method: This method requires that the previously reported financial statements should be revised to reflect the current accounting change. The change in a reporting entity and change in accounting principle are accounted for retrospectively ...

Intermediate Accounting: Reporting and Analysis

2nd Edition

ISBN: 9781285453828

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

Publisher: Cengage Learning

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Intermediate Accounting: Reporting and Analysis

Ch. 22 - Prob. 1GI Ch. 22 - Prob. 2GI Ch. 22 - Prob. 3GI Ch. 22 - What steps are necessary to apply the...Ch. 22 - Prob. 5GI Ch. 22 - Prob. 6GI Ch. 22 - Prob. 7GI Ch. 22 - Prob. 8GI Ch. 22 - Define a change in estimate. What is the proper...Ch. 22 - Prob. 10GI

Ch. 22 - How is a change in depreciation method accounted...Ch. 22 - Describe a change in a reporting entity. How does...Ch. 22 - Prob. 13GI Ch. 22 - Prob. 14GI Ch. 22 - Prob. 15GI Ch. 22 - Prob. 16GI Ch. 22 - Prob. 17GI Ch. 22 - Prob. 18GI Ch. 22 - Prob. 19GI Ch. 22 - Prob. 20GI Ch. 22 - The cumulative effect of an accounting change...Ch. 22 - When a change in accounting principle is made...Ch. 22 - Prob. 3MC Ch. 22 - A change in the expected service life of an asset...Ch. 22 - Prob. 5MC Ch. 22 - Generally, how should a change in accounting...Ch. 22 - Prob. 7MC Ch. 22 - A company has included in its consolidated...Ch. 22 - Prob. 9MC Ch. 22 - Prob. 10MC Ch. 22 - Prob. 1RE Ch. 22 - Prob. 2RE Ch. 22 - Prob. 3RE Ch. 22 - Prob. 4RE Ch. 22 - Bloom Company had beginning unadjusted retained...Ch. 22 - Suppose that Blake Companys total pretax...Ch. 22 - Bliss Company owns an asset with an estimated life...Ch. 22 - At the end of 2016, Framber Company received 8,000...Ch. 22 - Prob. 9RE Ch. 22 - Prob. 10RE Ch. 22 - Prob. 11RE Ch. 22 - Prob. 12RE Ch. 22 - The following are independent events: a. Changed...Ch. 22 - Prob. 2E Ch. 22 - The following are independent events: a. A...Ch. 22 - Prob. 4E Ch. 22 - Prob. 5E Ch. 22 - Prob. 6E Ch. 22 - Prob. 7E Ch. 22 - Prob. 8E Ch. 22 - Prob. 9E Ch. 22 - Prob. 10E Ch. 22 - Prob. 11E Ch. 22 - The following are independent errors made by a...Ch. 22 - The following are independent errors made by a...Ch. 22 - Refer to the information in E22-13. Required:...Ch. 22 - Prob. 15E Ch. 22 - Prob. 16E Ch. 22 - Prob. 1P Ch. 22 - Prob. 2P Ch. 22 - Prob. 3P Ch. 22 - Prob. 4P Ch. 22 - Prob. 5P Ch. 22 - Prob. 6P Ch. 22 - Prob. 7P Ch. 22 - At the beginning of 2017, Holden Companys...Ch. 22 - Prob. 9P Ch. 22 - Prob. 10P Ch. 22 - Prob. 11P Ch. 22 - Prob. 12P Ch. 22 - Prob. 13P Ch. 22 - Prob. 14P Ch. 22 - There are three types of accounting changes:...Ch. 22 - Prob. 2C Ch. 22 - Prob. 3C Ch. 22 - When the FASB issues a new generally accepted...Ch. 22 - It is important in accounting theory to be able to...Ch. 22 - Prob. 6C Ch. 22 - Prob. 7C Ch. 22 - Prob. 8C Ch. 22 - Prob. 9C Ch. 22 - Prob. 10C

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Solution Summary: The author explains the three types of accounting changes: retrospective adjustment, prospective accounting, and change in accounting estimate.

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