Disclosure for Changes in Accounting Estimates disclosed, 164, accounting, referring, something

z1985

I came across this question in the Q Bank which indicates that there is no specific disclosure required for changes in accounting estimates. However, the bottom of the 4th paragraph on pg 164 of the FSA CFA Text reads " Significant changes should be disclosed in the footnotes" (which I think is referring to a change in accounting estimates). Am I missing something? Here is the question and solution:

Changes in asset lives and salvage value are changes in accounting:

A) principle and specific disclosures are required.

B) estimates and no specific disclosures are required.

C) estimates and specific disclosures are required.


Your answer: C was incorrect. The correct answer was B) estimates and no specific disclosures are required.

Changes in asset lives and salvage value are changes in accounting estimates and are not considered changes in accounting principle. No specific disclosures are required.

draz

Significant changes would be like changes in accounting principle where there is a retrospective adjustment needed, like a change in the way the company recognizes revenue, or even a change in depreciation method.