Company A performs a quarterly analysis to estimate its excess and obsolete inventory reserve (E&O reserve). The Companys policy is to identify and specifically reserve for obsolete inventory and review forecasted sales to calculate excess inventory on hand. Based on the most recent forecast which shows a decrease in sales, the Company determines that its current E&O reserve is understated. Accordingly, the Company records an adjustment to increase the E&O reserve balance. The change is not material to the financial statements. 1. Is this change allowed? If so, is it a Change in accounting principle Change in accounting estimate Correction of an error in previously issued financial statements, or Change in reporting entity 2. In what Period should this be recognized (retrospective, current and/or prospective) 3. Is financial statement disclosure required?