AICPA Exam CPA-Financial Topic 2 Question 60 Discussion

Choice 'a' is correct. A change in the valuation technique used to measure fair value is a change in accounting estimate.

Choice 'b' is incorrect. Per SFAS No. 157, a change in valuation technique is a change in accounting estimate, not a change in accounting principal.

Choice 'c' is incorrect. Although a change from the cost approach to the market approach is a change in valuation technique, a change in valuation technique is not defined as a type of accounting change, but instead falls into the category of changes in accounting estimate.

Choice 'd' is incorrect. Both the market approach and the cost approach are acceptable methods of measuring fair value per SFAS No. 157; therefore, switching between these methods is not the correction of an error. Additionally, an error correction is not a type of accounting change.

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