An accounting change that requires the retrospective approach is a change in
A) the life of equipment from five to seven years.
B) depreciation method from straight-line to double-declining-balance.
C) the specific subsidiaries included in consolidated financial statements.
D) the percentage used to determine the allowance for bad debts.

Question

Quizplus · Accepted Answer

A change in the specific subsidiaries included in consolidated financial statements is considered a change in reporting entity, which requires retrospective application.

An Accounting Change That Requires the Retrospective Approach Is a Change