A change in the measurement basis applied is a change in an accounting policy, and is not
Question:
A change in the measurement basis applied is a change in an accounting policy, and is not a change in an accounting estimate. When it is difficult to distinguish a change in an accounting policy from a change in an accounting estimate, the change is treated as a change in an accounting estimate. (IAS 8, p35).
Required
a) Explain the accounting treatment for a change from the residual balance method of depreciation to the straight line method of depreciation.
b) Explain the accounting treatment for a change from the weighted average method to a FIFO (first-in first-out) method for valuing the cost of inventory.
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy