Question

Change of method from WDV to SLM they were limited charge appreciation on its plant and machinery at 10% per annum on the diminishing balance method during 2000 1920 the company decided to adopt straight-line method of changing depreciation with prospective effect as per S 10 at the time of change of charging method of depreciation it was decided by management to review the useful life of machine at after review it was found that old machine is expected to run for a further period of five years with scrap value of Rs.5 980 value is expected to work for 10

Answer 1

Answer:

Change in Method of Depreciation

Explanation:

Accounting policies and principles need to be consistently applied while recording the financial transactions. This is the Principle of Consistency. Any change in the method of depreciation implies a change in accounting estimate. Thus, there should be valid reasons for a change in method of depreciation.