Occurs when a company uses information to adjust a previously made approximation. The approximation could be the percentage of credit sales that will prove to be uncollectible, the useful life of an asset, or any other estimate used in preparing the financial statements. The accounting for a change in estimate is done prospectively. In other words, the company makes no change to previously published financial statements nor does it restate as if the new estimate had always been used. Instead, the company just begins to use the new estimate in the statements. Note disclosure of the change in estimate is required.