Why this is mistaken
A method label does not establish the accounting category. Test whether the transactions are comparable, both methods are acceptable, later information changed an estimate, or the old method was wrong. A depreciation-method change also follows the inseparable principle-estimate route rather than the ordinary retrospective shortcut.
Where to watch
When this mistake may appear
- Management begins using a different calculation or presentation method.
Check your work
Your work may contain this mistake if:
- Calls the change retrospective before testing the transaction and evidence boundaries.