Cost Accounting Practice Change - Examples

Illustrations of changes which do not meet the definition of “Change to a cost accounting practice

Description	Accounting Treatment
(a)	Example
Example	Example
(b)	Example
Example	Example
(c)	Example
Example	Example
(d)	Example
Example	Example
(e)	Example
Example	Example
(f)	Example
For a particular class of assets for which technological changes have rarely affected asset lives, a contractor starts with a 5-year average of historical lives to estimate future lives. He then considers technological changes and likely use. For the past several years the process resulted in an estimated future life of 10 years for this class of assets. This year a technological change leads to a prediction of a useful life of 7 years for the assets acquired this year for the class of assetsExample	The change in estimate (not in method) is not a change in cost accounting practice. The contractor has not changed the method or technique used to determine the estimate. The methodology applied has indicated a change in the estimated life, and this is not a change in cost accounting practice.
(g)	Example
Example	Example