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hello and welcome to the session this is professor farhat in which we will discuss accounting changes an important topic in accounting we make changes in accounting all the time whether that change is a change in accounting principle change in estimate change because of an error regardless we need to preserve comparability of financial information simply put when theres a change from year to year we need to present the change so we can compare the information the financial information from year to year otherwise historical financial data would lose its relevance we would lose the trend so its very important to understand how do we handle accounting changes specifically we deal with three types of accounting changes change in accounting principle and here change in accounting principle means going from one gap method from one gap method to another gap method so theyre both gabbed or both both acceptable and were going from one to the other such as going from the average cost to lif
