11 Jan What do we mean by a change
Week 5 discussion
DQ1 Corporate Reporting of Accounting Changes
What do we mean by a change in accounting principle? Where are changes in accounting principle disclose on a company’s annual report? How is the change reflected on a company’s financial statements? The most noteworthy item on the income statement is net income. The most noteworthy item on the cash flow statement is not net cash flow. Explain this comment. Do you agree?
DQ2 Change in Estimates
What do we mean by a change in accounting estimates? How is a change in accounting estimate different than a change in accounting principle? Why did the accounting profession choose to handle changes in estimates using the prospective approach instead of the retrospective approach?
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