1. Type of accounting change. 2. Manner of reporting the change under current generally accepted accounting principles including a discussion, where applicable, of how amounts are computed. 3. Effect of the change on the balance sheet and income statement. 4. Footnote disclosures that would be necessary.

Case 3- In January of 2015, Mike's company was told they would be fined for violating state regulations. After discussing it with their attorney's they received a possible range of between $150,000 to $400,000 in liability for the violation. When the financial statements were issued in 2015, Mike's had not reached a settlement with state authorities, so they accrued a contingent liability of $175,000. Late in 2016, a settlement was reached with state authorities to pay a total of $350,000 in penalties.