Current GAAP Defines Three Types of Changes

Essay

Current GAAP defines three types of changes:
a. Changes in accounting principle
a. A change in accounting principle occurs when a company adopts a generally accepted accounting principle that is different from the one previously used. This can occur when the FASB issues a new standard. This type of change should be
b. Changes in accounting estimate
c. Changes in reporting entity
Define each item, give an example, and describe how it should be accounted for.