Change in accounting principle

Assignment Help Accounting Basics
Reference no: EM13999937

W.R. Grace & Co. is a global specialty chemicals company. The following disclosure note was included in recent financial statements:

Change in Accounting Principle

In the third quarter of 2008, Grace changed its method of accounting for the cost of its U.S. inventories from the last-in/first-out method, or LIFO, to the first-in/first-out method, or FIFO. Grace decided to make this change in order to achieve a consistent inventory costing method for both U.S. and non-U.S. inventories. Grace has retrospectively restated prior periods' financial statements for all periods presented herein to account for all inventories using FIFO in compliance with generally accepted accounting principles.

Required:

Why does GAAP require W.R. Grace to retrospectively adjust prior periods' financial statement for this type of accounting change? 

Reference no: EM13999937

Questions Cloud

Restrictions of commercial speech were constitutional : Under what conditions has the Court ruled that restrictions of commercial speech were constitutional? What is the Court’s four-prong test?
Journal entries to record the issuance of the bonds : Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 104 and (2) 98.
Income before income taxes : Assume that the adjusting entry for $2,890 million of accrued expenses was not recorded at the end of the current period. What would have been the income (loss) before income taxes? Enter your answer as a positive amount, even if it is a loss.
Develop key success factors : Recommend any organizational change management strategies that may enhance successful implementation. Develop key success factors, budget, and forecasted financials, including a break-even chart
Change in accounting principle : Why does GAAP require W.R. Grace to retrospectively adjust prior periods' financial statement for this type of accounting change?
What approximate fraction of a sample remains undecayed : The half-life of radium-224 is about 3.6 d. What approximate fraction of a sample remains undecayed after two weeks? How many protons and neutrons does a neutral atom designated as 4018X contain?
Presentation to present the team strategic plan paper : Create a 15- to 25-slide Microsoft PowerPoint presentation to present the team's strategic plan paper, highlighting all relevant elements from previous weeks. The purpose of the presentation is to sell the plan. Make it succinct, visually interest..
Is signaling profitable for the owners of good quality cars : How many years of warranty would good quality car owners have to offer to credibly differentiate (separate) themselves from bad quality. i.e. credibly signal their quality?
Assess potential global strategies for the organization : Recommend a strategy or combination of strategies the organization should implement, and include a rationale for that recommendation.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd