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Replace Image into the Accounting Contract

Replace Image into the Accounting Contract

Aug 6th, 2022

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How to Replace Image into the Accounting Contract

4.9 out of 5

34 votes

In this video tutorial, the presenter explains how to account for a change in accounting principle, illustrated by a company's shift from one GAAP method to another, such as moving from the percentage of completion method to the completed contract method for construction contracts. This change is accounted for retrospectively, meaning that an adjustment is made to prior periods' financial statements, along with a necessary adjustment to retained earnings. The presenter emphasizes that this process should be followed unless deemed impracticable. Additionally, the video covers the required disclosures, including the nature of the change (e.g., switching from the weighted average cost method of inventory to FIFO) and the reason for the change.

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