When a company changes an accounting policy, the cumulative effect of the change is disclosed
A)in the statement of changes in equity (or statement of retained earnings), as an adjustment to the opening balance.
B)in the statement of comprehensive income.
C)in the income statement, above profit from continuing operations.
D)in the income statement, below profit from continuing operations.

Question

Quizplus · Accepted Answer

When a company changes an accounting policy, the cumulative effect of the change is disclosed in the statement of changes in equity (or statement of retained earnings), as an adjustment to the opening balance. This is because the change impacts the company's equity and not its income statement.

When a Company Changes an Accounting Policy, the Cumulative Effect