A change in the salvage value of an asset depreciated on a straight-line basis and arising because additional information has been obtained is
A) An accounting change that should be reported in the period of change and future periods of change if the change affects both
B) An accounting change that should be reported by restating the financial statements of all prior periods presented
C) A correction of an error
D) Not an accounting change

Question

Quizplus · Accepted Answer

A change in the salvage value of an asset is considered a change in accounting estimate, which should be reported in the period of change and in future periods affected by the change. This is not a correction of an error, and it does not require restating the financial statements of prior periods. Therefore, the best choice is A.

A Change in the Salvage Value of an Asset Depreciated