Changes in accounting policy are Permitted if the change will result in a more reliable and more relevant presentation of the financial statements. Permitted if the entity encounters new transactions, events or conditions that are substantively different from existing or previous transactions. Required for all material transactions. Required if an alternate accounting policy gives rise to a material change in assets, liabilities or the current year net income.

Choose the correct.Which of the following statements concerning U.S. GAAP is true?a. Does not require segment information to be reported in accordance with generally accepted accounting principles.b. Does not require a reconciliation of segment assets to consolidated assets.c. Requires geographic area information to be disclosed in interim financial statements.d. Requires disclosure of a major customer’s identity.

Revenue Recognition Discuss transition methods of this new revenue standard, i.e., how an entity should apply this new standard for the first time.  Which transition method do users/investors of financial statements likely prefer? Why? Which transition method do preparers of financial statements likely prefer?  Why?

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.

When an event impacts a financial statement element, it should be recognized in the accounting records even if reliability of the amount is questionable. True False

Which of the following accounting changes is always accounted for prospectively? correction of an error change in accounting estimate change in accounting principle change in reporting entity

When it is difficult to distinguish between a change in accounting estimate and a change in accounting policy, the change is treated as: a. Change in accounting estimate with appropriate disclosure b. Change in accounting policy c. Correction of error d. Change in accounting estimate with no appropriate disclosure

Adoption of ASC Topic 606 related to revenue recognition represents a Multiple Choice voluntary change in accounting principle Omandatory change in accounting principle. O voluntary change in accounting estimate. mandatory change in accounting estimate.

If the statement of financial position error is discovered in a subsequent accounting period, what action is to be done by the entity? A. Reclassify the item to its proper real account but do not restate the statement of financial position of the prior year affected by the error. B. Reclassify the item to its proper real account. C. Restate the statement of financial position of the prior year affected by the error. D. Reclassify the item to its proper real account and restate the statement of financial position of the prior year affected by the error

Which of the following is not classified as an accounting change by IFRS?(a) Change in accounting policy.(b) Change in accounting estimate.(c) Errors in fi nancial statements.(d) None of the above.