A change in accounting principle that is implemented using the retrospective approach includes:
A) implementing the change in the current period only and not adjusting for the cumulative effects on prior periods.
B) applying the new standard to the adoption period only and recording the cumulative adjustment for prior periods to the beginning balance of retained earnings.
C) restating financial statements of all periods presented as if the new standard had been used in those periods.
D) not accounting for the change in the current period or prior periods.

Question

Quizplus · Accepted Answer

The retrospective approach involves restating financial statements of all periods presented as if the new standard had been used in those periods. This approach provides a more accurate representation of the company's financial position and results of operations. Choices A, B, and D do not accurately reflect the retrospective approach.

A Change in Accounting Principle That Is Implemented Using the Retrospective