MOQ Change Accounting policy

This topic has 3 replies, 2 voices, and was last updated 5 years ago by MikeLittle.

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November 17, 2016 at 1:04 pm #349571
gabbi08
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Dear Mike

Could you kindly help with below question?

Which one of the following would be treated as a change of accounting policy?

A. Tunshill has received its first government grant and is applying the deferred income method.
B. Tunshill has revalue its propriety. Up to now they had all been carried at historical cost
C. Tunshill has reclassified development costs from other operating expenses to cost of sales
D: Tunshill has increased its irrecoverable debt allowance from 10% to 12%

The answer provided by the book is C with following explanation: “this is a change in presentation so it is a change of accounting policy.

My question is: Why answer B could not be considered change in accounting policy?
Wouldn’t the revaluation change the presentation?

Thanks in advance for your help

Best Regards

Gabbi
November 17, 2016 at 1:24 pm #349577
MikeLittle
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Hmm, that’s how I see it too

Just check again to ensure that you haven’t misread neither the question nor the answer
November 21, 2016 at 2:10 pm #350329
gabbi08
- Topics: 135
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Dear Mike,

I double check the question and it looks like I have written in the forum. Anyway, my questions are:

Should reclassification of cost as option C be considered changes in accounting policy?

Am I right if I say that changing the revaluation is a change of accounting policy?

Thanks again for your help

Gabriella
November 21, 2016 at 3:56 pm #350378
MikeLittle
Keymaster
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Answer C certainly is

But so too is answer B

That’s why I said in my previous post

“Hmm, that’s how I see it too”
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