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FRIAS 8

Bblack15y ago
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 ??
Bblack15y ago#1
because in the question its treated as change in accounting estimate...!! :S
and plz tell whats the treatment for change in accounting estimate ?
MikeLittleMikeLittleTutor15y ago#2
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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