18.9 - Change in Method of Depreciation
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Practice Questions
Test your understanding with targeted questions
What does retrospective application mean in the context of depreciation?
💡 Hint: Think about how changes are applied.
Name one reason a company might change its depreciation method.
💡 Hint: Consider the factors affecting asset usage.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is a primary reason for changing the method of depreciation?
💡 Hint: Consider how asset usage impacts financial decisions.
True or False: Changes in accounting estimates are applied retrospectively.
💡 Hint: Think about how future financial statements are affected.
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Challenge Problems
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A company has assets that were initially depreciated using the straight-line method. Due to increased production, they want to shift to the declining balance method. Outline the steps they would take to implement this change.
💡 Hint: Consider what information needs to be reviewed before making the change.
Reflect on a situation where a business’s change in usage leads to a new depreciation estimate. Discuss the financial implications it might have for its balance sheet.
💡 Hint: Think about how useful lives affect financial performance over time.
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