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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