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In this video, the tutorial explains how to account for a change in accounting principle, such as switching from one GAAP method to another. For instance, if a company changes from the percentage of completion method to the completed contract method for construction contracts, it represents a change in accounting principle that must be accounted for retrospectively. This involves revising prior periods' financial statements and adjusting retained earnings accordingly. However, if it's impracticable to do so, the video notes that a separate explanation will follow. Additionally, it emphasizes the need to disclose the nature of the change, such as switching from the weighted average cost method of inventory to FIFO, along with the reasons for the change.