Historically, the Companys policy has been to recognize legal fees associated with a loss contingency as those fees were incurred. Prospectively, the Company will accrue the total estimated legal fees when the claim is incurred. Management provides you with the guidance which states that either method is acceptable under US GAAP 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?