When a company changes one of its accounting methods, the change must be disclosed in the financial statements of a company. The reasoning for the change, the effect on net income, and the justification of the change all should be disclosed. The disclosure should indicate the cumulative effect of the change on net income of prior periods and the current period. The cumulative effect on income is usually found listed after extraordinary items.
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CHANGES IN ACCOUNTING PRINCIPLES
- Front Matter
- Body Matter
- Back Matter