Here's my p.m. motivational quote. “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” -Thomas A. Edison
And slightly nonmotivational, but hopefully will makeyou laugh:
The change of any other inventory method to US GAAP LIFO method is considered to be a change in accounting ESTIMATE whose method is applied prospectively.
I just finished my second Exam and I must say, even though my overal percentage went down from an 81% to a 77% I am highly impressed with the increase in my topic scores. I still have trouble with Consolidations and Shareholder's equity, but of the 17 MCQ I got wrong, 11 were things I knew, but either didn't read the question or didn't read all the answers. So RTMFQ and RATMFA! Of the 3 SIMS I got wrong, each one was due to a dumb mistake. I'm pretty happy right now. 🙂
@M‘Bear, let me quote this from Becker's F1 Lecture Outline:
Changes in Principle – Exception:
When it is impracticable to estimate the change in RE that would result from restating the prior FS, the change in method is applied prospectively (like changes in estimate). In this case, no restatement of prior years occurs and there is no cumulative effect report in the statement of RE (e.g., changing to US GAAP LIFO from any other inventory method).
So I thought with this exception, the change of any other inventory method to LIFO method is then considered a change in accounting estimate now.
@14Month-Monk–No, I'm using Wiley. I wish I could have afforded Becker, but hopefully Wiley will be enough for me.
@Amor–I took my first test on 03/26 and missed 28 MCQ and 1 SIM. My scores were awful for 9 topics. On my second test I have 100% on 6 of those topics. 🙂 I know these don't really mean much because the SIMS are not a good representation of the real test at all and unlike the real test, easy questions are the same amount as hard questions, but I like taking the test for time and to get used to all of the different topics in one sitting since I usually study one topic at a time in sets of 30.
@Amor–That makes sense, but in the questions I have seen where it would switch to estimate I thought it stated that the prior year inventory under the new cost method was not estimable so I assumed if it didn't say that then they were able to determine a good estimate to use and would treat it as a change in principle. I could be wrong about that though. I haven't seen a question about that in a while. I'll take Beckers word for it and just know that changing to LIFO is an estimate and to treat it proactively. Thanks for the reminder!
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