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Which of the following statements regarding depreciation is correct?
A All non-current assets must be depreciated.
B Straight line depreciation is usually the most appropriate method of depreciation.
C A change in the chosen depreciation method is accounted for retrospectively, with all previous depreciation charges reversed and
recalculated.
D Depreciation charges must be based on the carrying amount of an asset (less residual value if appropriate).
Given correct answer is D..But why it is correct answer? Depreciation charge must not be based on the carrying amount it is also based on the cost(straight line method)..May be alternative B is more appropriate answer..Pls disclose this question,thanks in advance 🙂Where did you find this question?
Assuming that you have copied it correctly, then D is not correct (for the reason that you have given).
B is not correct – no method is usually more appropriate than any other method.
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