**Change in accounting estimate**

Change in accounting estimate refers to the revision of an estimated amount or the revision of an estimated useful life or depreciation method for an asset.

**Option D: Differences arising between certain parameters estimated earlier and re-estimated during the current period AND Differences arising between certain parameters estimated earlier and actual results achieved during the current period**

Option D is the correct answer because change in accounting estimate can occur in two situations:

1. Differences arising between certain parameters estimated earlier and re-estimated during the current period: Sometimes, due to changes in circumstances or new information, it becomes necessary to revise an estimated amount. For example, if a company initially estimated that it will receive $10,000 as bad debt expense, but during the current period, it revises this estimate to $15,000 based on new information, it is considered a change in accounting estimate.

2. Differences arising between certain parameters estimated earlier and actual results achieved during the current period: Another situation where a change in accounting estimate can occur is when the actual results achieved during the current period differ from the earlier estimated amounts. For example, if a company estimated that it will incur $50,000 as repair and maintenance expenses, but during the current period, it actually incurs $60,000, it is considered a change in accounting estimate.

**Importance of change in accounting estimate**

Change in accounting estimate is important because it ensures that financial statements reflect the most accurate and reliable information. It allows companies to adjust their estimates based on new information or changes in circumstances, thereby providing more relevant and useful financial information to users of financial statements.

**Disclosure and accounting treatment**

When a change in accounting estimate occurs, it is important for a company to disclose the nature of the change and its impact on the financial statements. This can be done through footnotes or in the management discussion and analysis section of the financial statements. The change in accounting estimate should be applied prospectively, meaning that it should be implemented from the current period onwards and should not be applied retrospectively to prior periods.

**Conclusion**

In conclusion, change in accounting estimate refers to the revision of an estimated amount or the revision of an estimated useful life or depreciation method for an asset. It can occur when there are differences between the earlier estimates and the re-estimated amounts or between the earlier estimates and the actual results achieved during the current period. Option D is the correct answer as it encompasses both situations where change in accounting estimate can occur.