A company that switches from straight-line amortization to double-declining-balance amortization during an accounting period must report this change on the financial statements as:

Question

Quizplus · Accepted Answer

The change from straight-line to double-declining-balance amortization represents a change in accounting principle, which is required to be reported as a cumulative effect adjustment on the financial statements. This change should be disclosed explicitly and the effect on prior periods should be presented retrospectively.

A Company That Switches from Straight-Line Amortization to Double-Declining-Balance Amortization