CFA Practice Question

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CFA Practice Question

Which change needs to be applied retrospectively to the financial statements?

A. A company wants to change the useful life of an asset from 5 years to 7 years.
B. A company determines it must change the residual value of an asset from $2,000 to $3,000.
C. Neither of these changes should be applied retrospectively.
Correct Answer: C

These changes need to be made prospectively (going forward).

User Contributed Comments 4

User Comment
Yrazzaq88 I believe the only change retrospectively, is if the company decided it wanted to change to Double Declining balance? No?
praj24 no
xd2163 Changing in accounting estimate only requires changes be applied prospectively
khalifa92 retrospective changes are only associated with changes in accounting standards.
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