- 1 Marks
Question
In accordance with the requirements of IAS-8 – Accounting Policies, Estimates and Errors, which of the following changes in method does not give rise to changes in accounting policy?
A. Measurement of PPE from cost to revaluation model
B. Presentation of depreciation from cost of sale to administrative expense
C. Calculation of depreciation from straight line to sum of digit method
D. Recognition of an expense from capitalisation to expensing
E. Reclassification of non-current asset to current asset
Answer
Answer: B. Presentation of depreciation from cost of sale to administrative expense
Explanation:
A change in the presentation of depreciation from cost of sale to administrative expense does not result in a change in accounting policy as it only affects the classification within the financial statements. This change is in the presentation rather than in the accounting treatment of the depreciation itself. Other changes, such as the method of depreciation (e.g., from straight-line to sum-of-digit method) or recognition of expenses, would require changes in the accounting policy.
- Tags: Accounting policy, Financial Statements, IAS 8
- Level: Level 1
- Topic: Sources of Nigerian Law
- Series: NOV 2019
- Uploader: Dotse