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When the accounting principle is applied to two or more previously issued financial statements as if the principle had always been used is known as the retrospective application.

According to FASB ASC 250-10-45-5

The business should report the change in accounting principles through retrospective application of the new accounting principle to all prior periods unless it is impracticable to do so.

It requires the following:

1. The total effect of the change should be presented in the carrying amount of assets and liabilities at the beginning of the first period presented.

2. An adjustment to the opening retained earnings balance

3. Financial statements for each individual prior period presented should be adjusted to reflect the period-specific effects of applying the new account principle.