Statement No. 154: reporting Accounting Changes.FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). has issued Statement No. 154, Accounting Changes and Error Corrections, which applies to all voluntary changes in accounting principle, and changes the requirements for accounting for and reporting of a change in accounting principle. Statement No. 154 replaces APB Opinion APB opinion A determination by the former Accounting Principles Board regarding the way a certain financial transaction is to be treated for reporting purposes. No. 20 and FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 3. Statement 154 requires retrospective application to prior periods' financial statements of a voluntary change in accounting principle unless it is impracticable. Statement 154 also requires that a change in method of depreciation, amortization or depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able for long-lived, nonfinancial assets Nonfinancial assets Physical assets such as real estate and machinery. be accounted for as a change in accounting estimate that is effected by a change in accounting principle Statement 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after Dec. 15, 2005. Earlier application is permitted for accounting changes and corrections of errors made occurring in fiscal years beginning after June 1, 2005. For more information, visit www.fasb.org/news/nr060105.shtml. |
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