Describe the approach the fasb requires for reporting

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Question - Identify and describe the approach the FASB requires for reporting changes in accounting principles.

The FASB believes that the retrospective approach provides financial statement users the most useful information.

Under this approach, the prior statements are changed on a basis consistent with the newly adopted standard; any cumulative effect of the change for prior periods is recorded as an adjustment to the beginning balance of retained earnings of the earliest period reported.

Reference no: EM131819265

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