If a change in accounting principle is made in an interim period, the change is made using the same methodology for retrospective application discussed and illustrated earlier in this chapter. Management is precluded from using the impracticability exception to avoid retrospective application to prechange interim periods of the same fiscal year in which the change is made. Thus, if it is impracticable to apply the change to those prechange interim periods, the change can only be made as of the beginning of the following fiscal year. FASB believes this situation will rarely occur in practice.
APB 28 requires that interim financial reports disclose any changes in accounting principles or the methods of applying them from those that were employed in
The prior fiscal year;
The comparable interim period of the prior fiscal year; and
The preceding interim periods of the current fiscal year.
The disclosures required by FAS 154 for changes in accounting principle are to be made, in full, in the financial statements of the interim period in which the change is made.
When a public company adopts a new standard in an interim period, the APB 28 disclosures cited above are to be supplemented, as applicable, with all disclosures required by the newly adopted standard to be included in annual financial statements. If the change is made in a period other than the first quarter, prior filings are not required to be amended; however, adjustment of ...