Changes in accounting principles

As a general background, accounting principles are what you select for your company as a framework based on which you start recording your accounting entries, reporting on your results. The question one might have is whether accounting principles once chosen can be changed and I don’t mean changed entirely like you’d change from your local accounting principles to international ones for instance, but if the accounting framework you’ve applied gives you a chance to choose between accounting treatments for certain areas. 

The short and simple answer is that ‘yes, it’s allowed’. Changes in accounting treatments are allowed if the new method gives a truer and fair view of the area in question or is representing the information more accurate.

Another thing to remember with changes in accounting policies comes down to how often such things should be done. Once you’ve chosen a certain method for this specific area, it’s to be used consistently. A change is something that should occur rarely and it should be thought through carefully. Once a change is made, this new method is to be applied consistently again.