FAR 3 Flashcards
1
Q
What are the 3 types of Accounting changes?
A
- Change in accounting principle
- Change in report entity
- Change in settings
2
Q
How is a change in accounting principle made?
A
- Retrospectively
- Include in footnotes (what and why)
3
Q
How is a change in reporting entity made?
A
- Retrospectively
4
Q
How is a change in estimate made?
A
- Prospectively
5
Q
Give examples of a change in estimate.
A
- Change in depreciation method
- Change in salvage, EUL (effective useful life)
6
Q
Give examples of a change in reporting entity.
A
- Consolidated to unconsolidated
- Change in subsidiaries
- Change in the use of the equity method for an investment
7
Q
Give examples of a change in reporting entity.
A
- Change in method of accounting for inventory (FIFO to LIFO)
- Change in method of revenue recognition (completed contract to percentage of completion)
8
Q
True or False: Remeasurement gains and losses are reported directly on the income statement as foreign currency gains and losses
A
True
9
Q
True or False: Translation gains and losses are recognized as a translation adjustment on the face of the balance sheet
A
True
