Changes in accounting policy are to be made retrospectively or prospectively,depending upon the background to the change.

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Changes in accounting policy can be made retrospectively or prospectively depending on the nature of the change and the impact it has on prior financial statements. Retrospective application means that the change is applied to prior periods as if the new policy had always been in effect, whereas prospective application means that the change is only applied to current and future periods going forward. The decision on whether to apply retrospectively or prospectively is typically based on factors such as materiality, feasibility of restatement, and comparability of financial statements.

Changes in Accounting Policy Are to Be Made Retrospectively or Prospectively,depending