How would a company report a change in an accounting principle made on the last day of the third quarter?
A)Retrospective application to all pre-change interim periods reported.
B)No change is required.
C)Apply to current and prospective interim periods only.
D)Apply to prospective interim periods only.

Question

Quizplus · Accepted Answer

According to ASC 250-10-45-5, when a company changes an accounting principle or method, it must retrospectively apply the new principle to all prior periods presented in the financial statements unless it is impracticable to do so. Therefore, the company would need to retroactively apply the change to all pre-change interim periods reported.

How Would a Company Report a Change in an Accounting