[Anonymous]

I’m using Becker and the “A” in the IDEA mnemonic specifically states that the Cumulative Effect of Changes in Accounting Principle are reported in the Statement of Retained Earnings. What about Changes in Accounting Entity and Error Corrections? They all seem to have retrospective application, which would affect Retained Earnings of prior periods… right? But why are Changes in Accounting Principles singled out as the only thing to be reported in the Statement of Retained Earnings?

[rknight21]

for the record i think mnemonics are silly… but to each their own

[Anonymous]

I'm just so tired of hearing the word “mnemonic”!

[pshustler]

No idea why they did that. Threw me for a loop too at first

BEC - 86
AUD - 94
REG - 88
FAR - 89

[WhyMe23]

Yeah I think all 3 (Accounting principle, entity and error) are adjustments to the beginning balance of RE for the earliest period reported. I guess a change in accounting principle is the best way to remember it but some changes in accounting principles that are inseparable from estimates (depreciation) affect continuing operations instead. So there are always exceptions but they try to give you the best way to remember the basics.

And I personally like some mnemonics but I usually switch around the letters or come up with phrases that I remember better, Becker's mnemonics aren't always that helpful.

B - 85 (5/31/11)
A - 93 (7/1/11)
R - 87 (7/29/11)
F - 77 (8/31/11)

[Author]

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