Depreciation judgments and changes in estimates

Learning objectives

• Prepare the disclosure about a change in useful life and its effect.L3

Normative references

• IAS 16 §75The depreciation method and useful life involve judgement: disclosing them helps users to review the policies selected by management; the depreciation for the period (recognised in profit or loss or as part of the cost of other assets) and the accumulated depreciation at the end of the period must also be disclosed.
• IAS 16 §76Under IAS 8: nature and effect of a change in an accounting estimate that has an effect in the current period or subsequent periods; for property, plant and equipment, this may concern residual values, the estimated costs of dismantling, removing or restoring items, useful lives and depreciation methods.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

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