As part of the year-end accounting process and review of operating policies, Cullen Co. is considering a

Question:

As part of the year-end accounting process and review of operating policies, Cullen Co. is considering a change in the accounting for its equipment from the straight-line method to an accelerated method. Your supervisor wonders how the company will report this change in principle. He read in a newspaper article that the FASB has issued a standard in this area and has changed for a “change in estimate that is effected by a change in accounting principle.” (Thus, the accounting may be different from that he learned in intermediate accounting.) Your supervisor wants you to research the authoritative guidance on a change in accounting principle related to depreciation methods.
Instructions
If your school has a subscription to the FASB Codification, go to aaahq.org/ascLogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses.
(a) What are the accounting and reporting guidelines for a change in accounting principle related to depreciation methods?
(b) What are the conditions that justify a change in depreciation method, as contemplated by Cullen Co.?
(c) What guidance does the SEC provide concerning the impact that recently issued accounting standards will have on the in a future period?

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