Review Case $22-10,$ Researching GAAP, in your text. Prepare a reply to the president that includes the required information presented in the case in response to Situation I, II$,$ or III. Use your readings from the text and at least one additional academic resource to provide support for your response. The websites provided in the module reading and resources may be used along with any other reputable site. Remember to use proper APA$-$style formatting.Researching GAAP

AICPA Adapted 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.

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

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 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 III

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 previously acquired

equipment for which depreciation had been provided on an accelerated basis.

Directions

For each of the preceding situations, research the related generally accepted accounting principles

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.