alleryIncrease in useful life from 5 to 8 years is treated as:
APrior period adjustment
BChange in accounting estimate
CChange in accounting policy
DRetrospective restatement
Answer & Solution
Correct answer: B. Change in accounting estimate
1. Useful life is an accounting estimate.
2. A change in estimate is applied prospectively from the date of change.
3. The remaining depreciable amount is spread over the revised remaining life.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §5 change in life_
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