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In this video tutorial, the presenter explains how to account for a change in accounting principle, specifically when a company switches from one GAAP method to another, such as transitioning from the percentage of completion method to the completed contract method for accounting construction contracts. This change is accounted for retrospectively, meaning prior period financial statements must be adjusted, along with an update to retained earnings. The video emphasizes that these steps should be followed unless it is impracticable to do so, in which case a separate video will address that scenario. Disclosure requirements also include detailing the nature of the change, such as switching inventory methods from weighted average cost to FIFO.