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In this video tutorial, the presenter explains how to account for a change in accounting principle, such as switching from one GAAP method to another, like moving from the percentage of completion method to the completed contract method for construction contracts. This change is accounted for retrospectively, meaning prior financial statements must be adjusted accordingly, along with retained earnings. The video emphasizes that this process is to be followed unless it is impracticable to do so, in which case a separate guidance will be provided. Key disclosures required include the nature of the change and the reason for the adjustment, such as switching from the weighted average cost method of inventory to FIFO.