A company recognizes a change in estimate by making a retrospective adjustment to the financial statements.

Name: A company recognizes a change in estimate by making a retrospective adjustment to the financial statements.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A change in estimate is recognized prospectively by including it in the financial statements of the period of change and future periods if the change affects both. It does not involve retrospective adjustments to prior period financial statements.

A Company Recognizes a Change in Estimate by Making a Retrospective