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Replace Circle in the Accounting Contract

Replace Circle in the Accounting Contract

Aug 6th, 2022

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How to Replace Circle in the Accounting Contract

4.7 out of 5

41 votes

In this video tutorial, the presenter explains how to account for a change in accounting principle, specifically when a company switches from one GAAP method to another, such as changing from the percentage of completion method to the completed contract method for construction contracts. The change must be accounted for retrospectively, which involves revising prior period financial statements and adjusting retained earnings unless it's impracticable. The video will outline the necessary disclosures, including the nature of the change (e.g., switching from the weighted average cost method to FIFO) and the reason for the change. Further details on impracticable situations will be provided in a subsequent video.

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