A change in accounting principle that is inseparable from a change in estimate

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  • September 8, 2015 at 10:15 pm #196728
    hessmt
    Member

    Perhaps someone can help me understand this problem a little better:

    [True] or [False]: A change in accounting principle that is inseparable from a change in estimate requires disclosure in the current year’s financial statements as well as retrospective application.

    Answer: [False] – A change in accounting principle that is inseparable from a change in estimate is accounted for as a change in principle and therefore requires retrospective application.

    Is the statement false because it does not require disclosure in the current year’s financial statements? What am I missing here?

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