When using the retrospective approach for a change in accounting principle,disclosure rules require that

A) prior years' income statements presented for comparative purposes be restated to reflect use of the new principle unless it is impractical to do so.
B) all prior years' income statements be restated to reflect use of the new principle,and include a pro forma net income figure of the previously reported income.
C) no prior years' income statements be restated,but a pro forma net income figure be provided to reflect use of the new principle for each year presented.
D) no prior years' income statements be restated,and no pro forma net income figures be provideD.

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Rachel Olayinka · Accepted Answer

Final Answer : A, Explanation :  Disclosure rules require restatement of prior years' income statements presented for comparative purposes to reflect the use of the new accounting principle, unless it is impractical to do so. This ensures that users can compare financial statements on a consistent basis and understand the impact of the change in accounting principle on prior periods. However, if restatement is impractical, a pro forma adjustment should be made to the current period's income statement.

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