The following 10 situations all involve a change in accounting. For each situation, assume the company is public unless specified otherwise.

a. Straight-line depreciation for the past three years has been calculated with no deduction for residual value because none was expected; management now believes a residual value of \(10 \%\) of original cost is appropriate.

b. Straight-line depreciation for the past three years has been calculated with no deduction for residual value because of an oversight.

c. A private company had been using full allocation for income taxes; the company changes to the taxes payable method for the current year.

d. Arithmetic error was made in calculating the closing inventory for 20X1; it now is 20X3.

e. A tree farm changed its inventory valuation method from historical cost to net realizable value to comply with the requirements of IAS 41. Past NRVs cannot be determined.

f. Investment property was reported at fair value in prior years but the measurement method was discovered to be flawed. A more accurate method has been adopted for the current year.

g. Changed from straight-line depreciation to units-of-production depreciation to conform to industry practice.

h. The unamortized balance of capitalized development costs is deemed worthless as the result of technological changes; all further development costs will be expensed.

i. A private company adopted percentage of completion for long-term construction contract; all prior contracts were short term and used completed-contract.

j. Changed from revenue recognition at cash collection to revenue recognition at point of delivery because of a marked improvement in the creditworthiness of the customer.

Required:

For each of these situations, briefly explain:

1. The type of accounting change.

2. The appropriate method for reporting the change, including a discussion of how amounts, if any, are determined.

3. The effect of the change on the financial statements, if any.