As part of its broader effort toward convergence with international reporting standards, the Financial Accounting Standards Board has issued Statement No. 154, "Accounting Changes and Error Corrections."
Statement 154 -- which supplants both APB Opinion No. 20 and FASB Statement No. 3, but contains elements of each -- requires that any change in method of depreciation, amortization or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate that is effected by a change in accounting principle.
The board said that the new standard is part of its effort to work in concert with the International Accounting Standards Board toward developing a single set of high-quality accounting standards.
FASB board member Michael Crooch, a collaborator on the project, said in a statement, "This is one example where the board concluded that the IASB requirements result in better financial reporting. We were able to make a meaningful improvement in U.S. GAAP while converging with the IASB."
Statement 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after Dec. 15, 2005. Earlier application is permitted for accounting changes and corrections of errors made in fiscal years beginning after June 1, 2005.
Statement 154 is accessible on FASB's Web site at
