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understated depreciation- accounting estimate error or prior period error?

This topic has 1 reply, 2 voices, and was last updated 1 year ago by Stephen Widberg.

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August 17, 2021 at 10:14 am #631812
Noah098
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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?
August 18, 2021 at 8:54 am #631912
Stephen Widberg
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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
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