Go Retro

The FASB released Statement 154 today which requires that accounting changes be handled retroactively (unless impracticable). The big changes form Opinion 20 are that changes in depreciation or amortization method are changes in estimates (that is affacted as a change in accounting principle, i.e. restate prior periods) and

Statement 154 carries forward many provisions of Opinion 20 without change, including the provisions related to the reporting of a change in accounting estimate, a change in the reporting entity, and the correction of an error. Statement 154 also carries forward the provisions of Statement 3 that govern reporting accounting changes in interim financial statements.

Statement 154 becomes effective for fiscal years beginning after Dec. 15, 2005.