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Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business enterprise.
• 1. A change from the completed-contract method to the percentage-of-completion method of accounting for long-term construction-type contracts.
• 2. A change in the estimated useful life of previously recorded fixed assets as a result of newly acquired information.
• 3. A change from deferring and amortizing preproduction costs to recording such costs as an expense when incurred because future benefits of the costs have become doubtful. The new accounting method was adopted in recognition of the change in estimated future benefits.
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