Researching GAA Sometimes a business entity may change its method of accounting for certain items. It may classify the change as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. The following are three situations faced by Hyde Company relating to accounting changes. were in no danger of nationalization Accordingly, Hyde will prepare consolidated financial statements for Hyde and Patten for the year ended December 31, 2016 Situation I Hyde determined that the depreciable lives of its fixed assets are presently too long to fairly match the cost of the fixed assets with the revenue produced. Hyde decided at the beginning of the current year to reduce the depreciable lives of all of its existing fixed assets by 5 years. Situation II Hyde decides in January 2016 to adopt the straight-line method of depreciation for equipment. The straight-line method will be used for new acquisitions, as well as for previ- ously acquired equipment for which depreci- ation had been provided on an accelerated basis. SituationII On December 31, 2015, Hyde owned 51% of Patten Company, at which time Hyde reported its investment using the cost method, owing to political uncertainties in the country in which Patten was located. On January 2, 2016, the management of Hyde was satisfied that the political uncertainties were resolved and the assets of the company Directions For each of the preceding situations, rescarch the related generally accepted accounting princi- ples and prepare a short memo to the president that explains the following: type of accounting change; manner of reporting the change under current generally accepted accounting principles including a discussion, where applicable, of how amounts are computed; effect of the change on the balance sheet and income statement; and note disclosures that would be necessary. Cite your references and applicable paragraph numbers