Question

If a firm changes the valuation approach used to determine fair value, how would the amount of change in fair value resulting from the change in the valuation approach be reported?

Answer 1

Answer: As a change in accounting estimate

Explanation:

It should be noted that, the amount of change in fair value due to change in the valuation approach, which is supposedly used in determining fair value is known as a change in accounting estimate. In a nutshell this can be simply explained that the amount of the change e.g change in fair value, which comes from market forces, shall be recorded as income from continuing operations.