Plane & Lathe is a securities broker and investment bank located in Manchester. Plane & Lathe specializes in trading on the London Stock Exchange. Recently, due to economic changes, Plane & Lathe has started trading predominantly on the New York Stock Exchange. Their functional currency changed, as a result, from the British pound to the U.S. dollar. This change is considered a change in accounting policy.

Question

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This change is considered a change in accounting estimate, not a change in accounting policy. Changing the functional currency is a response to economic realities and does not represent a voluntary change in the principles or methods of accounting.

Plane & Lathe Is a Securities Broker and Investment Bank