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change in accounting principle

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1. Under what conditions is a change in the method of depreciation treated as a change in accounting principle?

2. What is the new codification(s) that answers this question?

3. Provide a real world example.

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This explanation provides you a comprehensive argument relating to change in accounting principle. New codifications that answer questions are analyzed.

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Change in the Method of Depreciation treated as a change in accounting principle.

1. Under what conditions is a change in the method of depreciation treated as a change in accounting principle?
SFAS 154 says that changes in depreciation will now be viewed as changes in estimate that are affected by a change in accounting principle. These changes will be handled prospectively. So if a there is a change in the method of depreciation, for example a change from the straight line method to the units of output method, SFAS 154 says that the changes in depreciation will be viewed as a change in estimate that re effected by a change in the accounting principle.

2. What is the new ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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