Types of Changes

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• Types of Changes as outlined in APB #20

  • Change in accounting principle.
  • Change in accounting estimate.
  • Change in reporting entity.
  • Also: Correction of an error (Prior Period Adjustment)

• Change in Accounting Principle

  • One GAAP to another GAAP.
    • From an unacceptable principle to an acceptable one is not a change in principle, it is the correction of an error.
    • First time application of a GAAP is not a change in principle.

Chapter 23 Accounting Changes

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