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Replace Initials Field from the Accounting Contract

Replace Initials Field from the Accounting Contract

Aug 6th, 2022

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How to Replace Initials Field from the Accounting Contract

4.6 out of 5

46 votes

This video tutorial explains how to account for a change in accounting principle, specifically when a company switches from one Generally Accepted Accounting Principles (GAAP) method to another, such as moving from the percentage of completion method to the completed contract method for construction contracts. The change must be accounted for retrospectively, meaning prior periods' financial statements will need to be adjusted, along with a corresponding adjustment to retained earnings. This process is only bypassed if it is impracticable, in which case a separate tutorial will be provided. Additionally, the video covers necessary disclosures regarding the nature of the change, such as switching inventory methods from weighted average cost to FIFO.

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