[lz221476]

I noticed when you make accounting changes, sometimes they also asked for separate disclosure. Separate disclosure only apply to retrospective and retroactive adjustment or all changes need separate disclosure? What kinda situation need separate disclosure? Anyone can give me a conclusion? Thanks!

[musicamor]

First, you need to determine the type of treatment – is the accounting change a retroactive/retrospective adjustment or is it prospective? Prospective adjustments typically do not need to be disclosed because of their forward-looking nature. As with any amount in accounting, materiality will be a determining factor in this process.

If you're making a change that affects a previously reported period, disclosure is necessary. The applies with changes that impact retained earnings; however, changes in estimate such as depreciation are typically not disclosed unless material.

Texas CPA - licensed in 2012!!!

[musicamor]

First, you need to determine the type of treatment – is the accounting change a retroactive/retrospective adjustment or is it prospective? Prospective adjustments typically do not need to be disclosed because of their forward-looking nature. As with any amount in accounting, materiality will be a determining factor in this process.

If you're making a change that affects a previously reported period, disclosure is necessary. The applies with changes that impact retained earnings; however, changes in estimate such as depreciation are typically not disclosed unless material.

Texas CPA - licensed in 2012!!!

[Author]

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