Which of the following disclosures is required for a change from sum-of-the-years-digits to straight-line depreciation method?
A) The cumulative effect on prior years, net of tax, in the current retained earnings statement
B) Restatement of prior years' income statements
C) Recomputation of current and future years' depreciation
D) All of these are required.

Question

Quizplus · Accepted Answer

A change in depreciation method is accounted for prospectively. This means that the depreciation expense for the current and future years is recalculated according to the new method, but prior years' financial statements are not restated.

Which of the Following Disclosures Is Required for a Change