Therefore because certain changes are avoidable the challenge is to disclose

Therefore because certain changes are avoidable the

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accounting change can potentially create inconsistency. Therefore, because certain changes are avoidable, the challenge is to disclose the effects of the changes in a way that is most easily to understand by other users of financial statements, who create several adjustments of their own to make information equivalent for analysis reasons. With that said investors would like to have knowledge of all findings and not bits and pieces in order for them to make a suitable and sound decision. Secondly, since changing an accounting principle is unlike changing an accounting estimate or reporting entity; accounting principles will impact the methods used, while an estimate refers to a particular recalculation. Changes in accounting principles can be difficult to understand and read for investors and other users of financial statements because the adjustments can appear identical to error corrections and often have negative interpretations. This is why it is best to record any changes in accounting principles early on to reduce any dilemmas, as well as, it can enhance the success of any follow up work. References Emett, S. A., Nelson, M.W. (2017). Reporting accounting changes and their multi-period effects. Science Direct. Retrieved from - com.ezproxy.snhu.edu/science/article/pii/S0361368217300144?via%3Dihub
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