Abstract This article presents three possible methods of reporting annual and interim changes in accounting estimates. A change in an accounting estimate results from the need to prepare financial statements for a period of time shorter than the total life of the enterprise. Economic activity continually unfolds as a series of new transactions before all of the old transactions are completed, and many transactions are incomplete at the end of the traditional interim and annual reporting periods. Estimates of future events are required to evaluate the end results of these incomplete transactions in order to enable accountants to determine results of operations and financial condition. In theory, there are at least three possible methods of reporting changes in accounting estimates: cumulative, prospective, and retroactive. Under the cumulative method, the amount reported for any period equals the cumulative amount through the end of that period less the cumulative amount reported for all prior periods.
Hugo Nurnberg (Thu,) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: