When a change in depreciation method occurs Group of answer choices Prior years' financial statements should be changed to reflect the newly adopted method The cumulative effect of the change should be reflected on the income statement as of the beginning of the next year The change should be reported in current and future fiscal years The cumulative effect of the change in accounting principle should be classified as an discontinued operations on the income statement

Question

Mira Cardenas

Business

11 December, 18:04

When a change in depreciation method occurs Group of answer choices Prior years' financial statements should be changed to reflect the newly adopted method The cumulative effect of the change should be reflected on the income statement as of the beginning of the next year The change should be reported in current and future fiscal years The cumulative effect of the change in accounting principle should be classified as an discontinued operations on the income statement

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Jaqueline Bass · Answer 1

The change should be reported in current and future fiscal years

Explanation:

The transformation in the depreciation method is indeed a transition mostly in accounting estimate. Consequently, quantitative measurements and public transparency are required in the endnotes. This also needs to answer the rationale as well as the financial consequences of the move.

Therefore, the depletion process may be modified either without necessary modifications as well as with retrospective effect. Excluding historical turn implies no provision for past entrants will be produced and the current system would only compensate for potential depreciation.