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In this video, the tutorial explains how to account for a change in accounting principles, specifically when a company transitions from one GAAP method to another (e.g., from the percentage of completion method to the completed contract method for construction contracts). This change is recorded retrospectively, meaning prior periods' financial statements are adjusted. An adjustment to retained earnings is also required unless it's impracticable. The video will also cover necessary disclosures, including the nature of the change (e.g., switching inventory methods from weighted average cost to FIFO) and the reason for the change. Further details on impracticable scenarios will be provided in another video.