CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

What type of disclosure is required for the cumulative effect of a change in an accounting principle?

A. The company must show the effect in a separate section of the income statement on a net of tax basis.
B. The company must disclose the effect in the footnotes to the financial statements only.
C. The company may not disclose the effect in the financial statements or notes because changes in accounting principles are common.
Correct Answer: A

The company must show the cumulative effect of the change in accounting principle on a net of tax basis in a separate section of the income statement and describe the change in the footnotes to the financial statements.

User Contributed Comments 2

User Comment
shobes5150 So A...and B?
Akiva shobes5150
Answer B is incorrect because the word "only" in answer's phrase
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