When an accounting change is to be recorded and reported under the Retrospective approach,the:

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Under the Retrospective approach, the cumulative effect of the accounting change is recorded by adjusting the opening balance of Retained Earnings in the earliest period presented. This adjustment reflects the total impact of the change on all previous periods. This ensures that the financial statements for each of the affected periods are restated to reflect the correct account balances and results of operations, as if the accounting change had been applied consistently since the beginning. Therefore, Choice A is correct. Choice B is incorrect because the cumulative effect of the change is not reported as a special item in the income statement. Choice C is incorrect because the effect of the change is not spread over past, current and future periods. Choice D is not required, as pro forma financial statements are not a mandatory disclosure for retrospective accounting changes.

When an Accounting Change Is to Be Recorded and Reported