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    Question

    A firm switches from the Straight Line Method (SLM) to

    Written Down Value (WDV) for fixed assets. What should be the accounting treatment as per AS-6 (or Ind AS 16)?
    A Retrospective adjustment in all previous years Correct Answer Incorrect Answer
    B Prospective change with disclosure Correct Answer Incorrect Answer
    C No change allowed once selected Correct Answer Incorrect Answer
    D Immediate write-off of full depreciation Correct Answer Incorrect Answer
    E Treat as extraordinary item Correct Answer Incorrect Answer

    Solution

    A change in depreciation method is a change in accounting estimate, hence applied prospectively with proper disclosure of reasons and impact.

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