You are to consider the following two scenarios:

Scenario 1 Fishtail Ltd has changed its basis of calculating doubtful debts from 2.5 per cent of gross accounts receivable to 4.0 per cent of gross accounts receivable.

Scenario 2 Fishtail Ltd has previously allocated costs to inventory using a weighted-average costing approach. It was decided to change to a first-in, first-out inventory cost-flow assumption.

REQUIRED

Identify, giving reasons, which of the above scenarios is a change in accounting policy and which is not a change in accounting policy. Further, you are required to describe how the above scenarios are to be accounted for.