Reference no: EM132944119

Question - Give the following FASB Codification exercise a try! As part of the year-end accounting process and review of operating policies, Cosper Co. is considering a change in the accounting for its equipment from the straight-line method to an accelerated method. Your supervisor wonders how the company will report this change in principle. He read in a newspaper article that the FASB has issued a standard in this area and has changed GAAP for a "change in estimate that is affected by a change in accounting principle." (Thus, the accounting may be different from what he learned in intermediate accounting.) Your supervisor wants you to research the authoritative guidance on a change in accounting principles related to depreciation methods.

What to do?

Respond to any of the questions and make sure to provide Codification references for your responses.

a. What are the accounting and reporting guidelines for a change in accounting principles related to depreciation methods?

b. What are the conditions that justify a change in depreciation method, as contemplated by Cosper Co.?

c. What guidance does the SEC provide concerning the impact that recently issued accounting standards will have on the financial statements in a future period?