Which of the following statements is not true regarding the adoption of ASC Topic 606 guidance for revenue recognition?

Multiple Choice

• Under the retrospective approach, each period presented is restated to what the financial statements would have been had the new standard always been in place.
• Upon adoption, entities can choose between the retrospective approach or the cumulative effect approach.
• Under the cumulative effect, the firm determines how the balance sheet would differ as of the first day of the year of adoption.
• When using the cumulative approach, the prior three years of financial statements need to be restated.