Companies can change accounting methods,but the changes are restricted to situations where it can be persuasively argued that the newly adopted accounting method is preferable to the old one.

Question

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Companies can change accounting methods, but they must demonstrate that the new method is preferable to the old one. This is in accordance with Generally Accepted Accounting Principles (GAAP) and Securities and Exchange Commission (SEC) regulations. The changes must also be disclosed in financial statements, and the impact on prior years' financial statements must be adjusted accordingly.

Companies Can Change Accounting Methods,but the Changes Are Restricted to Situations