Most changes in accounting principle require a disclosure justifying the change in the first set of financial statements that the change is made.

Question

Quizplus · Accepted Answer

When an accounting principle is changed, the first set of financial statements that are prepared after the change should include a disclosure explaining the reason for the change. This disclosure helps users of the financial statements understand the impact of the change on the financial results and make meaningful comparisons between periods. Therefore, the statement "Most changes in accounting principle require a disclosure justifying the change in the first set of financial statements that the change is made" is true.

Most Changes in Accounting Principle Require a Disclosure Justifying the Change