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14 Cards in this Set
- Front
- Back
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What are the two main accounting changes |
1. Change in accounting policy 2. Change in accounting estimate |
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It is an adjustment of the carrying amount of an asset or a liability or the amount of periodic consumption of an asset that results from the assessment of the present status and expected future benefits and obligations associated with the asset and liability |
Change in accounting estimate |
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What is the treatment of change in accounting estimate |
Currently and prospectively |
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What change is a change in depreciation method |
Change in accounting estimate |
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The specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements |
Accounting policies |
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It arises when an entity adopts a generally accepted accounting principle which is different from the one previously used by the entity |
Change in accounting policy |
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A change in accounting policy is possible when required by _____ |
Standard |
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Is change in accounting policy allowed if the change will result in more relevant and faithfully represented information about the financial position, financial performance, and cashflows of the entity? |
Yes |
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How is a change in accounting policy reported? |
Retrospectively and retroactively |
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It is applying a new accounting policy to transactions, other events, and conditions as if that policy had always been applied |
Retrospective application |
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In the absence of an accounting standard that specifically applies to a transaction or event, management shall use _____ in selecting and applying an accounting policy |
Judgement |
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It is a change whereby entities change their nature and report their operations in such a way that the financial statements are in effect those of a different reporting entity |
Change in reporting entity |
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These are omissions and misstatements in the financial statements for one or more periods arising from a failure to use or misuse of reliable information |
Prior period errors |
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Prior period errors are corrected _____ by adjusting the opening balances of retained earnings and affected assets and liabilities |
Retrospectively |
