"03-19M351 Notes-Day 24 Chg-Err 1

"03-19M351 - 22-4 and 22-5 on pages 1187 and 1188 for previous periods and a journal entry to change affected amounts for the current

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A. Changes in accounting principle : Report retrospectively : go back and change (write over) presented statement amounts as if the company had always been on the new accounting principle). See Illustrations 22-1, 22-2, and 22-3, 22-4 and 22-5 on pages 1185-1188 for an example of retrospective accounting principle change (completed contract to percentage completion). Because retrospective adjustments involve presenting the direct effects of changing presented amounts for both past years and current years, recognizing a retrospective adjustment involves writing over changed amounts (Illustration
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Unformatted text preview: 22-4 and 22-5 on pages 1187 and 1188) for previous periods and a journal entry to change affected amounts for the current period. Write overs are not made for indirect effects of retrospective adjustments B. Changes in accounting estimates : Report prospectively (change presented current period and future amounts. See the list on the top of page 1195 for financial statements requiring estimates, and are likely to require change in estimates. C. Changes in depreciation methods are accounted for as changes in estimate effected by changes in accounting principle . 1...
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This note was uploaded on 04/09/2011 for the course MGMT 351 taught by Professor Staff during the Winter '08 term at Purdue University-West Lafayette.

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