Methods for a change in accounting principle


Transition Methods for a Change in Accounting Principle

Response to the following problem:

When the FASB issues a new generally accepted accounting principle, it may require companies to apply the new principle prospectively, or to account for the change by the retrospective adjustment method.

Required:

Why do you think that the FASB requires one of two different transition methods when a company adopts a newly required accounting principle? Do you agree with the use of two alternative methods?

 

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Accounting Basics: Methods for a change in accounting principle
Reference No:- TGS02105961

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