Which of the following is a change in estimate?
A) A change from the full costing method in the extractive industries.
B) A change from recognizing construction contract revenue over time to recognizing revenue at a point in time.
C) Consolidating a subsidiary for the first time.
D) A change in the termination rate of employees under a pension plan.

Question

Quizplus · Accepted Answer

A change in the termination rate of employees under a pension plan is a change in estimate because it is a revision of an estimate used in prior periods based on new information or experience. The other options are changes in accounting principle (A and B) or accounting for an event for the first time (C).

Which of the Following Is a Change in Estimate