What is the difference between accounting changes and accounting errors? What are some similarities and differences in how they affect the financial statements?
Four Types of Accounting Changes
1. Change in accounting principle-Change from one generally accepted accounting
principle to another.
2. Change in accounting estimate-Revision of an estimate because of new information or
3. Change in reporting entity-Change from reporting as one type of entity to another type
4. Correction of an error-Correction of an error caused by a transaction being recorded
incorrectly or not at ...
The four types of accounting changes are discussed and how each is treated for GAAP.