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if there is a change in from straight line method to reducing balance method.
will this be a change in accounting policy acoording IAS 8
and treated as asjustments from opening retained earning ??because in the question its treated as change in accounting estimate…!! :S
and plz tell whats the treatment for change in accounting estimate ?The policy is “to depreciate an asset over its estimated useful life” so the policy hasnt changed. the accounting basis HAS changed – the company is now estimating that the best way of matching costs with revenues is the depreciate on a reducing balance basis. So this is a change in estimate.
Accounting treatment for a change in estimate is simply to apply the new estimate prospectively ie DON’T go backwards and restate the brought forward figures as you would for a change in policy
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