Discuss the reportin Opinion No. 20 accounting changes that was required b d. Discuss how accounting changes are to be reported under the provisions FASB ASC 250 . Case 6-7 ldentifying Accounting Changes Sometimes a business entity changes its method of accounting for certain items The change may be classified as a change in accounting principle, a change accounting estimate, or a change in reporting entity. Listed below are three inde dent, unrelated sets of facts relating to accounting changes. per Situation A company determined that the depreciable lives of its fixed assets were currentl oo long to fairly match the cost of the fixed assets with the revenue produced. The company decided at the beginning of the current year to reduce the depre- ciable lives of all its existing fixed assets by five years. Situation 2 On December 31, 2013, Gary Company owned 51 percent of Allen Company, at which time Gary reported its investment using the cost method owing to political uncertainties in the country in which Allen was located. On January 2, 2014, the management of Gary Company was satisfied that the political uncertainties were resolved and that the assets of the company were in no danger of nationalization. Accordingly, Gary will prepare consolidated financial statements for Gary and Allen for the year ended December 31, 2014. Situation 3 A company decides in January 2014 to adopt the straight-line method of depre- ciation for plant equipment. This method will be used for new acquisitions as well as for previously acquired plant equipment for which depreciation had been provided on an accelerated basis Required For each of the preceding situatioes, provide the information indicated below Complete your discussion of each situation before going on to the next situation. b. Manner of reporting the change under current GAAP, including a discus- c. Effects of the change on the statement of financial position and earnings a. Type of accounting change sion, where applicable, of how amounts are computed statement d. Required e disclosures Case 6-8 Classification of Accounting Changes Morgan Company arows various crops and then processes them for sale to retail