Question

When a change in depreciation method occurs Group of answer choices Prior years’ financial statements should be changed to reflect the newly adopted method The cumulative effect of the change should be reflected on the income statement as of the beginning of the next year The change should be reported in current and future fiscal years The cumulative effect of the change in accounting principle should be classified as an discontinued operations on the income statement

Answer 1

The change should be reported in current and future fiscal years

Step-by-step explanation:

The transformation in the depreciation method is indeed a transition mostly in accounting estimate. Consequently, quantitative measurements and public transparency are required in the endnotes. This also needs to answer the rationale as well as the financial consequences of the move.

Therefore, the depletion process may be modified either without necessary modifications as well as with retrospective effect. Excluding historical turn implies no provision for past entrants will be produced and the current system would only compensate for potential depreciation.