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Sagot :
When it is impossible to tell the difference between a change in estimate and a change in principle, the change should be regarded as an estimate change.
How do the financial statements update an estimate change?
On a prospective basis, changes in estimations are taken into account, such as changes to the projected useful life of a tangible asset or the bad debt allowance %. This indicates that the corporation need not alter past periods but that the present and upcoming financial statements must reflect the change.
What distinguishes an estimate revision from an error?
A mistake represents the incorrect use of information that was accessible at a previous financial statement reporting date, as opposed to a change in accounting estimate, which is the result of new information since that date.
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