- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 21. Understanding Income Statements
- Subject 6. Non-Recurring Items and Non-Operating Items
CFA Practice Question
Details of changes in accounting principles for depreciation are found ______.
A. on the balance sheet
B. on the income statement
C. in the notes to the financial statements
Explanation: The balance sheet accounts are not affected by the cumulative effects of accounting changes for depreciation. The balances in the asset and related accumulated depreciation accounts are not affected by the change. Only the amount of the cumulative effect (net of taxes) is found on the income statement. Details are found in the notes to the financial statements.
User Contributed Comments 0
You need to log in first to add your comment.