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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › understated depreciation- accounting estimate error or prior period error?
sir if last year depreciation was understated by $2m then what will its impact be in this year’s FSs? What exact balances will be affected of this year?
You may need to recap our FR lectures on prior period adjustments.
Minor understatement – adjust in current year – this year’s profit will go down
Major understatement – prior period adjustment – no impact on this year’s profit