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

Question

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This statement is true according to Generally Accepted Accounting Principles (GAAP). When an entity changes an accounting principle, it must disclose the justification for the change in the first set of financial statements after the change is made. This disclosure helps users of the financial statements understand why the change was made and how it affects the financial results.

Most Changes in Accounting Principle Require a Disclosure Justifying the Change