Changes in accounting estimates versus changes in accounting policies (for the @CFA Level 1 exam) discusses the prospective and retrospective treatment applied to the two types of changes under IFRS and US GAAP.
Accounting policies refers accounting principal and method of applying that accounting principles So is the change of methods results into change of accounting policy or change in estimates Since SLM to WDV is change in method thus its change in estimates However FIFO to WAM also a change in method of computing cost but it is change in accounting policy I am bit confused here
Well, the change from SLM to accelerated or other form of derpreciation is not technically considered a change in method but a change to the expected way in which an asset will generate benefits and hence is treated as a change in estimate. It is confusing and something strange, I know, but that's the way it is.
Hi, I am not an authority on US GAAP but I believe the following source is trustworthy: viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/inventory/Inventory-Guide/3_chapter_LIFO_inv/35_account_chang.html#unique_923047041 It says that when changing to LIFO the application method should be retrospective BUT because this may be impracticable (too difficult) to actually carry out, a company may opt to go with prospective application.
