BU397 Chapter Notes - Chapter 21: Pys, Retained Earnings, Financial Statement
Document Summary
Change in accounting estimate: change occurs in circumstances on which a previous estimate was based or as the result of new information, more experience or subsequent developments, e. g. change in useful life of equipment. Two levels of gaap: primary source of gaap, policies that are consistent with the primary sources of gaap and are developed by exercising professional judgment and applying concepts. Ifrs: similar to gaap, primary source are the ifrs and guidance, when no source exists use professional judgment. In cases where gaap specifically requires categorization of items and different policies to be chosen from: once an appropriate method is chosen from the ones that are allowed, it must be applied consistently to each category. A change in an accounting policy is permitted only when the change. Is required by a primary source of gaap: effect of the change will produce more relevant and reliable information.
