Changes in accounting principle are allowed where
A) they are required by a primary source of GAAP.
B) they result in reliable and more relevant information.
C) the company reports less favourable results under the new policy.
D) both a and b are correct.

Question

Quizplus · Accepted Answer

Changes in accounting principle are allowed if they are required by a primary source of GAAP or if they result in reliable and more relevant information. The fact that the company reports less favourable results under the new policy does not preclude a change in accounting principle.

Changes in Accounting Principle Are Allowed Where