CAF-1 · Chapter 10 · Question 2 of 15
How should an entity account for a change in the depreciation method of a machine from straight-line to reducing balance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Prospectively, as a change in accounting estimate.
Explanation
A change in depreciation method is treated as a change in an accounting estimate, which must be recognized prospectively by including it in the profit or loss of the current and future periods.
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