Sometimes a change in estimate and a change in accounting principle are undistinguishable therefore a company should account for the change as a change in accounting principle.

Question

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A change in estimate is accounted for prospectively, affecting only the period of change and future periods, while a change in accounting principle generally requires retrospective application to all prior periods presented, unless it is impracticable to do so. These are distinct accounting treatments.

Sometimes a Change in Estimate and a Change in Accounting