hard · Financial Accounting
Which of the following describes the correct accounting for a change in depreciation method (e.g., from double-declining balance to straight-line) under current U.S. GAAP (ASC 250)?
- It is treated as a change in accounting principle, requiring retrospective restatement of all prior years presented.
- It is treated as a change in accounting estimate effected by a change in accounting principle, handled prospectively.
- It is only allowed if the previous method is found to be in violation of GAAP.
- It is treated as an error correction, requiring a prior-period adjustment to beginning Retained Earnings.
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