Which of the following is not one of the approaches for reporting accounting changes? The change approach. O The retrospective approach. The prospective approach. O All of these answer choices are approaches for reporting accounting changes.

Which of the following is not one of the approaches for reporting accounting changes? The change approach. O The retrospective approach. The prospective approach. O All of these answer choices are approaches for reporting accounting changes.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

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

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4C: When the FASB issues a new generally accepted accounting principle, it may require companies to...

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Which of the following is not one of the approaches for reporting accounting changes?
The change approach.
O The retrospective approach.
The prospective approach.
O All of these answer choices are approaches for reporting accounting changes.

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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?
The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through c.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. non-public company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error c. Change from non-GAAP to GAAP (a special case of correction of an error)
What is the indirect effect of a change in accounting policy? Briefly describe the approach to reporting the indirect effects of a change in accounting policy under IFRS.
Which of the following is true regarding whether IFRS specifically addresses the accounting and reporting for effects of changes in accounting policies? Direct Effects Indirect Effects a. Yes Yes b. No No c. No Yes d. Yes No
Differentiate among the three types of accounting changes and distinguish among the retrospective, modified retrospective, and prospective approaches to accounting for and reporting accounting changes.
Discuss briefly the three approaches that have been suggested for reporting change in accounting principles.
What is meant by a change in accounting principle? Describe the possible accounting treatments for a mandatedchange in accounting principle
IFRS requires companies to use which method for reporting changes in accounting policies? a. Cumulative effect approach. b. Retrospective approach. c. Prospective approach. d. Averaging approach.