Indicate whether the following items are a $($a$)$ change in accounting principle, $(b)$ change in accounting estimate, $(c)$ change in reporting entity, or $(d)$ correction of an error.

A lessor discovers during the term of a finance lease that an estimated material unguaranteed residual value of the leased property has probably become zero.

A corporation with foreign subsidiaries has used the cost method of accounting for its investments in the subsidiary companies because economic conditions in the countries in which the subsidiary companies operate have been unstable and exchange of foreign currency into dollars has been restricted. Under changed, improved conditions, it has become feasible for the controlling entity to prepare consolidated statements instead, thereby eliminating the foreign investment account from the balance sheet of the corporation.

After five years of use, an asset originally estimated to have a $15-$year life is now to be depreciated on the basis of a $20-$year life.

Office equipment purchased last year is discovered to have been debited to office expense when acquired. Appropriate accounting is to be applied at the discovery date.

A company that has been using the FIFO inventory method is changing to LIFO.

A company that used $5\%$ of accounts receivable to estimate its expected credit losses discovers that losses are running higher than expected and changes to $6\%.$

Brief Exercise A$-11$ Identifying Accounting Changes and Errors LO$1,2,3,4$

$(18)$