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When switching from one depreciation method to another, what must be done?

Practice Questions

Q1
When switching from one depreciation method to another, what must be done?
  1. Recalculate past depreciation
  2. Disclose the change
  3. Ignore the change
  4. Change the asset's useful life

Questions & Step-by-Step Solutions

When switching from one depreciation method to another, what must be done?
  • Step 1: Identify the current depreciation method being used.
  • Step 2: Decide on the new depreciation method you want to switch to.
  • Step 3: Calculate the impact of the change on the financial statements.
  • Step 4: Update the accounting records to reflect the new depreciation method.
  • Step 5: Disclose the change in the financial statements, explaining why the change was made.
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