Which of the following describes the modified retrospective approach to implementing a change in accounting principle?

Multiple Choice

• The new standard is applied only to the current period and all future periods, and the cumulative effects of prior periods is shown as an adjustment to retained earnings.

• The new standard is applied to all periods presented in the financial statements.

• The new standard is applied only to current period and all future periods.

• The new standard is applied only to all future periods and not the current or previous periods.