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Replace Image from the Accounting Contract

Replace Image from the Accounting Contract

Aug 6th, 2022

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How to Replace Image from the Accounting Contract

4.6 out of 5

36 votes

In this video, the tutorial explains how to account for changes in accounting estimates, which are critical in areas such as estimating bad debt, useful life, and salvage value of property, plant, and equipment, as well as warranty liabilities. It acknowledges that managers can make mistakes in their estimates, necessitating adjustments and revisions. The method used for these adjustments is called prospective application, where errors are corrected moving forward without restating previous financial statements. For instance, if the useful life of an asset is revised from 16 to 20 years, the new depreciation is calculated and applied to future periods.

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