To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. Access the FASB’s Web site at www.fasb.org. Click on “FASB Pronouncements.”
In this chapter, we discussed issues relating to accounting changes. For this case, we will use Statement of Financial Accounting Standards No.154, “Accounting Changes and Error Corrections.” Open SFAS No. 154.
1. Paragraph 10 mentions the “indirect effects” of a change in accounting principle. Illustration 1 in Appendix A includes an example of an indirect effect. What is this indirect effect?
2. Paragraph B31 identifies three areas of difference between Statement No. 154 and IAS 8. What are those areas of difference?