[accountaholicc]

What are some examples of changes in accounting principals that are considered inseparable from changes in estimates and thus applied prospectively? Also what are some examples of the the changes in principals that are treated retroactively? I understand the concept, but would love to get some good examples compiled together so that I don’t even have to think about it on the exam.

For example:

Inseparable: After evaluating the likelihood of collecting various accounts receivable currently on its books, a company changed from the direct recognition method to the installment method for recognizing receivables.

REG- 66, 77
BEC- 72, 77
AUD- 55, 78
FAR- 8/16

Using Becker self study

[waffle_house]

Change in depreciation method. Going from DDB to straight line.

[cpaMD86]

Change in accounting estimate: Depreciation method used, useful life, allowance methods…
Change in accounting principle: Inventory method; FIFO/LIFO etc.

FAR: 9/3

[Author]

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