DRS Corporation changed the way it depreciates its computers from the sum-of-the-years-digits method to the straight-line method

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DRS Corporation changed the way it depreciates its computers from the sum-of-the-year’s-digits method to the straight-line method beginning January 1, 2021. DRS also changed its estimated residual value used in computing depreciation for its office building. At the end of 2021, DRS changed the specific subsidiaries constituting the group of companies for which its consolidated financial statements are prepared. 


Required: 

1. For each accounting change DRS undertook, indicate the type of change and how DRS should report the change. Be specific. 

2. Why should companies disclose changes in accounting principles?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-1260481952

10th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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