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In this video tutorial, the presenter explains how to account for changes in accounting estimates. Accounting often requires managers to make estimates regarding bad debt, useful life, salvage value of assets, and warranty liabilities. Mistakes can occur, necessitating adjustments. The video introduces "prospective application," a method where errors are corrected without restating prior financial statements. For example, if it is determined that the useful life of property, plant, and equipment is 20 years instead of 16, the estimate is updated, and future depreciation is calculated based on the new information, thereby moving forward with the revised figure.