Accounting · Accounting Policies, Changes in Estimates and Errors
A company changes its depreciation method from the straight-line method to the reducing balance method prospectively. Under Ind AS 8, which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The company must restate all prior periods' depreciation, adjusting the opening retained earnings.
- 2The company treats the change as a change in accounting estimate, adjusting depreciation expense in current and future periods only.✓
- 3The effect of the change must be applied from the beginning of the earliest comparative period.
- 4The change is disallowed under Ind AS; the depreciation method must always remain the same.
Correct answer
The company treats the change as a change in accounting estimate, adjusting depreciation expense in current and future periods only.
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