Chapter 11 - Reporting financial information Flashcards
1
Q
How to account for a change in accounting policy?
A
Retrospective (like policy was always in place)
adjust opening balance of R/E (PPA)
retate comparative info
2
Q
How to choose an accounting policy?
A
Apply correct standard
if no standard, use conceptual framework
- try to use relevant/reliable info
- substance over form, free from bias
3
Q
What are some examples of accounting estimates?
A
Depreciation method
Useful lives
Residual value
Warranty provision
4
Q
How to account for a change in accounting estimate?
A
Prospective (in current/future periods)
5
Q
What are prior period errors?
A
- available when F/s were issued
- could have been obtained when preparing F/S
6
Q
How to account for prior period errors?
A
Retrospective
Adjust opening balance of R/E in socie
Restate comparative
